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A) Which of the following is a loss that companies would self-insure? A. Fraud B. Officer...

A) Which of the following is a loss that companies would self-insure?

A.

Fraud
B.

Officer liability
C.

Product breakage
D.

Unexpected business interruptions

B) Which of the following statements is/are correct about a forward contract?

I.   Forward contracts require a good faith deposit before an agreement can be reached.

II.  Forward contracts are considered extremely risky since the price for the asset is determined when the contract matures.

A.

Only statement I is correct
B.

Only statement II is correct
C.

Both statements are correct
D.

Neither statement is correct

C) If the annual nominal interest rate on 5-year U.S. Government Treasury bonds is 7 percent, and the annual nominal interest rate on 5-year Canadian bonds is 5.5 percent, what is the expected future spot rate in 5 years given that the current spot exchange rate between U.S. dollars and Canadian dollars is $0.587?

A.

$0.595
B.

$0.547
C.

$0.578
D.

$0.630
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