An investor is considering the purchase of a financial instrument that promises to make the following payments: Years from Now 1 2 3 4 5 Promised Payment by Issuer $100 $100 $100 $100 $1,100 This financial instrument is selling for $1,243.83. Assume that the investor wants a 6.25% annual interest rate on this investment. Should the investor purchase this investment? A. Yes, the financial instrument is attractive B. No, the financial instrument is unattractive. C. Can't be answered. More information is needed to answer the question D. Indifferent.

What is the no arbitrage price of a risk-free investment that promises to pay $1,000 in one year? The risk-free interest rate is 3.5%. If you can purchase the investment for $950, do you have an arbitrage opportunity?

A customer is offered an investment where interest is calculated according to the force of interest,t {0.02t    0 ≤ t ≤ 3,   0.045      t > 3If the customer invest GH¢1000 now, what rate of interest, compounded quarterly is earned over the first 4 year period.

If you are expecting to get OMR 66634 at the end of 3 years. Calculate its present value if the interest rate is 9% and is computed quarterly.  Select one: a. 62333.02 b. 51019.88 c. 23696.30 d. 51454.83 e. All the given choices are not correct   The commodities or assets that are traded in financial market are called Select one: a. Financial Service b. Financial System c. None of the options d. Financial Institution e. Financial Instrument

Suppose you work as a broker in an investment company, and there is an expectation that the market interest rate will be 0.029. based on this expectation you are required to calculate the market price for the following CD;Issue date: 1 January 2021 Maturity date:10 May  2021.  The face value  OMR 10000.   Interest on CD:  5 percent.   Select one: a. 15942.02 b. 15574.10 c. 15677.97 d. All the given choices are not correct e. 15572.50

Assume you have the following asset and liability in your Balance Sheet: Asset - Bond A Modified Duration = 2.6 years Value = RM1.5 million Liability - Bond B Modified Duration = 3.1 years Value = RM1.0 million a. Calculate the duration gap.  b. What is the expected change in Net Worth if interest increases by 1%?  c. What should or could you to achieve immunised balance sheet?  Note: Please show all workings.

Your brother has asked you to help him with choosing an investment. He has OMR 5000 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 4.25 percent with the interest being paid quarterly. What will be the value of the investment in two years? Select one: O a. 5107 OMR O b. None of these Oc. 5441 OMR O d. 5341 OMR

Consider the following balance sheet (in millions) for an FI:               Assets                                     Liabilities Duration = 10 years                $950                                        Duration = 2 years                  $860 Equity                                     $90   What is the FI's duration gap, and FI's interest rate risk exposure ? How can the FI use futures and forward contracts to put on a macrohedge? What is the impact on the FI's equity value if the relative change in interest rates is an increase of 1 percent?  That is, DR/(1+R) = 0.01. Suppose that the FI in part (c) macrohedges using Treasury bond futures that are currently priced at 96. What is the impact on the FI's futures position if the relative change in all interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Assume that the deliverable Treasury bond has a duration of nine years. If the FI wants to macrohedge, how many Treasury bond futures contracts does it need?

Your friend told you about an NFT (Non-fungible Token)  that they think will be worth $7.5 in 5.8 years.  If your required return on investments of this risk is 1.5, what is the most you should be willing to pay for it today? Round to 2 decimal places.  Include a dollar sign ($) or percent (%) as appropriat

Assume that you will receive $2500 at the end of 6 years and want to know the present value (PV) of that future sum. Assuming a positive interest rate (required rate of return), which of the following is a possible number for the present value of the $2500? Even without knowing the interest rate, it is possible to answer this question. O A. $2742.53 B. $2632.45 O C. $1967.25 OD. $2572.50 O E. None of the above is a possible number.