Reference no: EM131056296 , Length:
Current data for pricing and obtaining rates can be found at www.ft.com under data archive.
1. The asset manager wants to fully hedge the interest rate risk on the bond by using bond futures. Calculate the appropriate number of bond futures that should be sold. (bond future data can be found at www.eurexclutoge.com)
2. Explain the risks of the interest rate swap position and how could it be could be hedged?
3. The asset manager would like to hedge the receipt of 450,000,000 to be received in one years' time from the maturity of the one year interbank deposit. Using current data from mvw.11.com, calculate a one year EIS forward rate and explain how it could be used the hedge the currency risk.
4. The asset manager thinks that there is some possibly that the currency markets could move in their favour and so ideally would like some degree of participation in any favourable move, whilst being fully protected against adverse moves. Discuss alternative hedging choices by using options.
5. The interest rate swap counterparty is the same bank to which the asset manager lent $50,000,000 via the USD LIBOR deposit. The asset manager is concerned that a default by the Bank could give rise to substantial credit risk. Discuss how derivatives could be used to hedge this risk.
|
The future value of that amount over
: .Joe spends $12 a week on coffee or $624 a year, what would be the future value of that amount over 10 years if the funds were deposited in an account earning 3 percent?
|
|
Increase rate of return for security assuming security
: Which one of the following will increase the rate of return for a security assuming the security continues to plot on the security market line? a. an increase in the market risk-to-reward ratio b. a decrease in the risk-free rate of return c. a decre..
|
|
Create a properly dimensioned isometric view
: From the two front view and section view provided, create a properly dimensioned isometric view. Create text styles for each isoplane. Create dimension styles, based on each text style.
|
|
What should be current stock price and required return
: What is the required return for Dentrix Corporation? The risk-free rate is 2.5%, the risk premium is 6.8, the expected rate of inflation is 3.4% and the company can currently issue bonds at a YTM of 4.9%. Ranyard's beta is 1.18, and the last dividend..
|
|
Calculate a one year eis forward rate
: Explain the risks of the interest rate swap position and how could it be could be hedged - Discuss how derivatives could be used to hedge this risk.
|
|
Program plan without a program evaluation
: Can you have a program plan without a program evaluation? Can you have a program evaluation without a program plan? If one or the other is possible, would either of these options be a good idea? Why or why not?
|
|
Find the market value of common stock-intrinsic stock price
: FCFs for year 1,2, and 3 are $20, $23, and $25 for a certain firm. The required rate of return for stock is 8%. Assume the firm’s life is 3 years then what should the stock price of this firm? This firm has $1 of debt and $1.5 of preferred stock. Num..
|
|
Circles of the network diagram
: A network diagramming method in which activities are shown on the boxes or circles of the network diagram and connect via arrows.
|
|
Program plan without a program evaluation
: Can you have a program plan without a program evaluation? Can you have a program evaluation without a program plan? If one or the other is possible, would either of these options be a good idea? Why or why not?
|