Question 511
Features of a firm's technology that lead to falling long-run average cost as output increases are
Question 512
Which of the following loans is typically not secured?
Question 513
Consider a two-year currency swap, with semi-annual settlements. It is fixed dollar rate for fixed yen rate swap. The initial exchange rate is 99 Yen to the dollar. Notional principal is $100 million. The fixed dollar rate is 6%. The fixed yen rate is 2%. Which answer best describes the changing currency exposures?
Question 514
How much will a trader make through covered interest arbitrage under the following exchange and interest rate conditions (assume the investment horizon is 1 year). Borrow $100 at an interest rate of 4%.
Convert the dollars to CNY at the spot rate of $0.1920. Invest the CNY in China at 8% interest. Sell the
CNY at the forward rate of 0.1879. What is the profit on the transaction?
Convert the dollars to CNY at the spot rate of $0.1920. Invest the CNY in China at 8% interest. Sell the
CNY at the forward rate of 0.1879. What is the profit on the transaction?
Question 515
What is the duration estimate of the dollar price change for a 10%, 20-year bond with a duration of
9 .969, selling at 132.03, when the yield changes by 1 basis point?
9 .969, selling at 132.03, when the yield changes by 1 basis point?