Differences and similarities between futures and forwards

Assignment Help Other Subject

Reference no: EM132718

QUESTION 1

(a) Distinguish, using financial assets as examples, between securities quoted at par and securities quoted on a discount

(b) Calculate the value of a £50,000 Treasury bill due in 40 days' time with a rate of interest on comparable securities equal to 4% p.a.

(c) The bank of England agrees to buy a £100,000 bill with an outstanding maturity of 60 days for £99,346.76 and resell the bill to the purchaser in 10 days's time for £ 99,455.04. Calculate the Repo rate

QUESTION 2

(a) Show that the pricing of Eurocurrency deposits and loans leads to lower profit margin by Eurobanks compared to onshore banks

(b) What are the factors that explain why the cost of collecting deposits and servicing loans in the Euro market is less that in the onshore market?

QUESTION 3

a. Explain the determination of foreign exchange rate in a flexible exchange regime

b. What are the factors that may cause a shift in

i. The demand for Pounds vis-à-vis the Dollar

ii. The supply of Pounds Vis-à-vis the Dollar

QUESTION 4

(a) What are the differences and similarities between futures and forwards?

(a) Distinguish between exchange traded instruments and over the counter instruments

(b) The following are details of a naked short put. You are requested to draw the pay-off diagram

Reference no: EM132718

Questions Cloud

Complete the subsequent tax return''s and schedule : Complete the subsequent tax return's and Schedule

Create corpus christis statement of retained earnings : Create Corpus Christis statement of retained earnings

Explain joint ventures and partnerships : Explain Joint Ventures and Partnerships

Organize a statement of cash flows : Organize a statement of cash flows

Differences and similarities between futures and forwards : What are the differences and similarities between futures and forwards. Distinguish between exchange traded instruments and over the counter instruments

Evaluate charger company''s monthly break-even point : Evaluate Charger Company's monthly break-even point and Evaluate the unit sales required to earn a monthly after-tax income.

Explain the auditors responsibility for detecting this fraud : Explain the auditors responsibility for detecting this fraud

Evaluate the success wellco and pharmacare shareholders : Evaluate the success WellCo and PharmaCARE shareholders

Show the rea diagram using microsoft word : Show the REA diagram using Microsoft Word

User Account

All Pages