Fixed interest bearing instrument, Other Management

Assignment Help:

QUESTION

When an investment is made in a fixed interest-bearing instrument, the risk is that the secondary market rate at which these instruments trade will increase, with a resulting decrease in the value of the instrument. On the other hand investments in non-interest-bearing assets such as shares, carry the risk that prices may decrease, resulting in a loss of value

Therefore explain-

(a) Fixed interest bearing instrument

(b) How hedging fixed interest rate and non-interest-bearing investments are carried out with option contracts


Related Discussions:- Fixed interest bearing instrument

Influence the level of market interest rate, Question 1 Suppose you are th...

Question 1 Suppose you are the CEO of MS Bank Corporation. Your bank is facing interest rate risk which has affected its operation significantly. Expalin the factors that influenc

Loose assemblage, Loose assemblage is assembling together of two or more of...

Loose assemblage is assembling together of two or more of: subjects (basic or compound) isolate ideas (in one and the same facet, or isolate ideas in one and the same array)

Periodicals selection - library management, PERIODICALS SELECTION: In ...

PERIODICALS SELECTION: In Section 8.2, you have seen that acquisition work includes three distinct phases of activities. Periodicals selection is the fist phase. The selection

Debt management policy, ‘The overall objective of debt management is to min...

‘The overall objective of debt management is to minimise the cost of borrowing to the organisation.' Required: I. Explain factors which need to be taken into account, other t

Document selection - library management system, DOCUMENT SELECTION: Yo...

DOCUMENT SELECTION: You have seen that acquisition work includes three distinct phases of activities. Document selection is the first phase. There are two aspects in document

Distinguish between functional value and emotional value, Question 1: (...

Question 1: (a) Define the term "value". (b) Distinguish between functional value and emotional value. Illustrate by using relevant examples. (c) How can functional an

Legal requirements for hospitality establishments, Question 1: Designs ...

Question 1: Designs need to be practical, functional and rational. According to you and with appropriate examples from the hospitality industry, what are the common problems fa

Role of inspection in quality management, R ole of inspection Inspecti...

R ole of inspection Inspection plays an important role in quality management. The products should be inspected at the end of the process to make sure that they meet the specif

Human resource development , HUMAN RESOURCE DEVELOPMENT  OBJECTIVES ...

HUMAN RESOURCE DEVELOPMENT  OBJECTIVES Human resources constitute the most important of all resources of any organization. Attention to managing and modulating this resource

Vatican rules - british museum cataloguing rules, Vatican Rules - british m...

Vatican Rules - british museum cataloguing rules: Vatican Library. Rules for the Catalogue of Printed Books I translated from the 2nd Italian edition 1938, by the very Rev. Th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd