Reference no: EM131962367
1. You expect to receive $34,000 at graduation in two years. You plan on investing it at 10 percent until you have $169,000.
How long will you wait from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Period ______ years
2. One reason for basis risk in an interest rate swap is that changes in the index on the variable rate portion of the swap may not be perfectly correlated with changes in the index on the balance sheet portion of the liabilities.
True
False
3. Which of the following is indicated by high numerical value of the duration of an asset?
Low sensitivity of an asset price to interest rate shocks.
High interest inelasticity of a bond.
High sensitivity of an asset price to interest rate shocks.
Lack of sensitivity of an asset price to interest rate shocks.
Smaller capital loss for a given change in interest rates.