What is her maximum potential loss

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Reference no: EM132017209

1. Carly has two positions in her brokerage account. She is short 1000 shares of GS and long 50,000 shares of a money market mutual fund. She received $100 per share upon opening her short position. What is her maximum potential loss?

a) 100,000 b) $150,000 c) 0 d) infinity

2. An advantage of some CMO tranches over MBSs is that some CMO tranches:

a) can protest investors from prepayment risk. b) are characterized by large bid-ask spreads. c) possess inverted duration d) are illiquid.

3. Which one is true?

a) one shortcoming of the yield-to-maturity approch to bond pricing is that is assumes that the yield curve is horizontal.

b) one shortcoming of the yield-to-maturity approch to bond pricing is that is assumes that only perpendicular shifts in the yield curve can occur.

c) both A and B are true

d) none of the above

Reference no: EM132017209

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