Describe how you plan to divide the money initially

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1. Assume that you have $1m dollars to invest and you want to build a diversified portfolio. Describe how you plan to divide the money initially and how you plan to rebalance your portfolio periodically

2. Nine months ago, you bought €50,000,000 1-year forward at the forward rate of 1.38 $/€. If current 3-month interest rates are 10% p.a. in the U.S. and 4% p.a. in the Eurozone, and the current spot exchange rate for euros is 1.43 $/€, then how much is your forward contract worth right now? If the forward contract were terminated today, would you expect to have to pay or receive this amount?

3. The current market price of a Leigh bond is $1297.6. If the coupon rate is 10% and the par value is equal to $1000 what is the yield to maturity of the bond if it matures in 10 years from today?

 

Reference no: EM132066429

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