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Homework Answers
1. Forward interest rate on 2 year loan, 2 year ahead
=> {(1.045)^4 / (1.025)^2} (0.5) -1
=> 6.5390% (Option E is correct)
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Suppose that today's annual market...
16 Suppose that today's annual market interest rates are 2.5% for a 2-year deposit/loan, 3.5% for...
16 Suppose that today's annual market interest rates are 2.5% for a 2-year deposit/loan, 3.5% for a 3-year deposit/loan, and 4.5% for a 4-year deposit/loan. What is the forward interest rate for a 2-year deposit in 2-year's time. (Use six decimals for your computations) 3.50000% 2.00000% 6.03921% 7.06127% 6.5390%
Suppose that today’s annual market interest rates are 2.5% for a 2-year deposit/loan, 3.5% for a...
Suppose that today’s annual market interest rates are 2.5% for a 2-year deposit/loan, 3.5% for a 3-year deposit/loan, and 4.5% for a 4-year deposit/loan. What is the forward interest rate for a 2-year deposit in 2-year’s time. (Use six decimals for your computations) A) 3.50000% B) 2.00000% C) 6.03921% D) 7.06127% E) 6.5390%
Question 16 9 pts Suppose that today's annual market interest rates are 2% for a 2-year...
Question 16 9 pts Suppose that today's annual market interest rates are 2% for a 2-year deposit/loan, 3% for a 3-year deposit/loan, and 4% for a 4-year deposit/loan. What is the forward interest rate for a 2-year deposit in 2-year's time. (Use six decimals for your compu- tations) O 3.00000% O 2.00000% 05.02205% 6.5390% 6.03921%
Please solve and show work fully for a rating. Thank you. 09 8$ Suppose you do...
Please solve and show work fully for a rating. Thank you.
09 8$ Suppose you do a carry trade for one semester in USDMXN in which you make a short sale of 1,000,000 USD at 22.10 MXN/USD. If you closed this trade at 22.05 MXN/USD and the effective 3-month rates for loans and deposits is 1.2500% for MXN and 0.0625% for USD, what are your profits? (Use six decimals for your calculations but round your final answer to the nearest...
Please solve and show work fully for a rating. Thank you. 129 12 65 Consider a...
Please solve and show work fully for a rating. Thank you.
129 12 65 Consider a 5-year bond with a face value of 100 USD/bond that pays coupons ev- ery six months. It has a yield to maturity of 4.0400% and an annual coupon rate of 4.0000%. What is the bond's price if there are no arbitrage opportunities? (Input your answer with 4 decimals)
Please solve and show work fully for a rating. Thank you. Suppose that the 10-year interest...
Please solve and show work fully for a rating. Thank you.
Suppose that the 10-year interest rate opens the day trading at 5.4578%. At the end of the day you read on the news that the 10-year interest rate closed the day 2 basis points lower. At what level did the 10-year interest rate closed the trading day? 5.4378% 5.2578% 5.4558% 3.4578%
Please solve and show work fully for a rating. Thank you. Suppose a credit card charges...
Please solve and show work fully for a rating. Thank you.
Suppose a credit card charges a 10% annual interest rate and recognizes the out- standing balance at the end of every month. How much would you end up paying for a 10,000 USD outstanding balance for three months? (Round the the nearest decimal) If the answer is A,B, C, or D, simply type the respective letter in the answer box. If the answer is E, write down the correct...
Please solve and show work fully for a rating. Thank you. Suppose you are a speculator...
Please solve and show work fully for a rating. Thank you.
Suppose you are a speculator who trades in the foreign exchange market. You take a short position in the AUDNZD at 1.0779. After two weeks have gone by, the AUDUSD is trading at 0.71860 and the NZDUSD is trading at 0.6825. If the lending/borrowing rate is 0% and you traded 1,000,000 AUD, what are your MTM profits in NZD? If the answer is A,B, C, D, E, or F,...
Please solve and show work fully for a rating. Thank you. 12 10 79 Suppose that...
Please solve and show work fully for a rating. Thank you.
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Please solve and show work fully for a rating. Thank you. You sold an option whose...
Please solve and show work fully for a rating. Thank you.
You sold an option whose MTM profits look like the picture below. What is the premium per unit that you charged your client? If the answer is A,BC, or D, simply type the respective letter in the answer box. If the answer is E, write down the correct answer and the unit of measurement. 240,000.00 172.452.00 -175,512.00 Page 9 56.84660 59.74630 A. 3.0 USD/unit B.2.5 USD/unit C. 1.2 USD/unit...
16 Suppose that today's annual market interest rates are 2.5% for a 2-year deposit/loan, 3.5% for a 3-year deposit/loan, and 4.5% for a 4-year deposit/loan. What is the forward interest rate for a 2-year deposit in 2-year's time. (Use six decimals for your computations) 3.50000% 2.00000% 6.03921% 7.06127% 6.5390%
Question 16 9 pts Suppose that today's annual market interest rates are 2% for a 2-year deposit/loan, 3% for a 3-year deposit/loan, and 4% for a 4-year deposit/loan. What is the forward interest rate for a 2-year deposit in 2-year's time. (Use six decimals for your compu- tations) O 3.00000% O 2.00000% 05.02205% 6.5390% 6.03921%
Please solve and show work fully for a rating. Thank you.
09 8$ Suppose you do a carry trade for one semester in USDMXN in which you make a short sale of 1,000,000 USD at 22.10 MXN/USD. If you closed this trade at 22.05 MXN/USD and the effective 3-month rates for loans and deposits is 1.2500% for MXN and 0.0625% for USD, what are your profits? (Use six decimals for your calculations but round your final answer to the nearest...
Please solve and show work fully for a rating. Thank you.
129 12 65 Consider a 5-year bond with a face value of 100 USD/bond that pays coupons ev- ery six months. It has a yield to maturity of 4.0400% and an annual coupon rate of 4.0000%. What is the bond's price if there are no arbitrage opportunities? (Input your answer with 4 decimals)
Please solve and show work fully for a rating. Thank you.
Suppose that the 10-year interest rate opens the day trading at 5.4578%. At the end of the day you read on the news that the 10-year interest rate closed the day 2 basis points lower. At what level did the 10-year interest rate closed the trading day? 5.4378% 5.2578% 5.4558% 3.4578%
Please solve and show work fully for a rating. Thank you.
Suppose a credit card charges a 10% annual interest rate and recognizes the out- standing balance at the end of every month. How much would you end up paying for a 10,000 USD outstanding balance for three months? (Round the the nearest decimal) If the answer is A,B, C, or D, simply type the respective letter in the answer box. If the answer is E, write down the correct...
Please solve and show work fully for a rating. Thank you.
Suppose you are a speculator who trades in the foreign exchange market. You take a short position in the AUDNZD at 1.0779. After two weeks have gone by, the AUDUSD is trading at 0.71860 and the NZDUSD is trading at 0.6825. If the lending/borrowing rate is 0% and you traded 1,000,000 AUD, what are your MTM profits in NZD? If the answer is A,B, C, D, E, or F,...
Please solve and show work fully for a rating. Thank you.
12 10 79 Suppose that you buy a 3-month call for 100,000 widgets with a strike price of 7.26990 USD/Widget and pay a premium of 5 cents/Widget. Additionally, you enter into a short sale of 100,000 widgets at 6.64720 USD/Widget. At the time of maturity, the spot price is trading at 6.7137 USD/Widget. What are your profits/losses? 21,990.00 USD 15,340.00 USD -11,650.00 USD -18,360.00 USD
Please solve and show work fully for a rating. Thank you.
You sold an option whose MTM profits look like the picture below. What is the premium per unit that you charged your client? If the answer is A,BC, or D, simply type the respective letter in the answer box. If the answer is E, write down the correct answer and the unit of measurement. 240,000.00 172.452.00 -175,512.00 Page 9 56.84660 59.74630 A. 3.0 USD/unit B.2.5 USD/unit C. 1.2 USD/unit...
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