Reference no: EM132001660

1. Suppose interest rates on Treasury bonds rose from 5% to 9% as a result of higher interest rates in Europe. What effect would this have on the price of an average company's common stock?

2. The Impact of a large upward shift in interest rates for a Floating Rate Note with zero spread is likely to be: a) large increase in value b) negligable difference c) modest fall in value d) large decrease in value

3. A company `bought' a 10 year semi-annual IR swap at a rate of 5% on a notional of £100m. Five years later, the 5 year swap rate is 4%. Which option best describes their mark to market position? a) they have unrealised loss of 10m b) loss of 4.5m c) profit of 4.5m d) profit of 10m