A trader enters into a FRA to receive at the rate 4% on the principal of $1,000,000 over the period 60 to 90 days. If, after 30 days, the 30-to-60 day FRA rate is 5% and the quoted yield on a 30 day bill is 4%, then what is the value of the FRA? O 819.22 O-815.87 O 815.87 O-819.22
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- Suppose you work as a broker in an investment company, and there is an expectation that the market interest rate will be 0.031. 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.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. 15572.502. Consider a 6% T-note with 1.5 years to maturity. Spot rates (expressed as semiannual yields to maturity) are: 6 months = 5%, 1 year = 6% and 1.5 years = 7%. If the note is selling for $992, compute the arbitrage profit and explain how a dealer would perform the arbitrage. Par value= 1,000
- A Credit Default Swap is structured like the one below for a protection of $100 million. If payments are made annually, what are the cash flows from A to B if there is a default after 2 years and 2 months and recovery rate is 40%? And what are the cash flows from B to A? 70 bps per year Default Default Protection Protection Buyer, A Seller, B Payoff if there is a default by reference entity=100(1-R)(i) What is the approximate annualized yield on a 6-month Treasury bill that is sold at $95 in the primary market? If the following day investors want an annualized yield of 12% what will happen to the price of the $95 Treasury bill with 6-month left to maturity? (Face value of Treasury bill is $100) Explain your reasoning. (ii) A 10-year Treasury bond (TBOND1) is sold on the market one day at $1000 with an annual coupon of $60. The following day good news hits the market and a new 10-year Treasury bond is sold on the market at an $50 annual coupon. What is the approximate new secondary market price of TBOND1? (Show your working in full)Assume that you conduct a relative value trade and close it out after 5 days. Your 5-day return is 0.84%. Annualize this return as a Bond Equivalent Yield (BEY). Assume that a year has 365 days. State your answer as a percent, but without the percent sign. So, for example, if your answer was 0.1053, which is 10.53%, you would answer 10.53.
- Consider a 1-year treasury bill that currently earns 3.25%. The increase in rates for the above bill is shown as follows: Year Increase in rate 1 year from now 3.6% 2 years from now 3.85% The liquidity premium is as follows: 2-year securities 3-year securities 0.07% 0.15% Assume that if the liquidity premium theory is correct. Calculate the current rate on 3-year Treasury securities.We observe the following treasury yields on a particular day: one-year 1.50%, two-year 2.25%, and three year 3.25%. If two-year term premium is 0.25%, on that day what did investors expect one-year interest rate to be next year?Group of answer choices a)1.875% b)2.5% c)2.375% d)2.25%Yesterday, you entered into a futures contract to sell €75,000 at $1.79 per €. Your initial performance bond is $1,500 and your maintenance level is $500. At what settle price will you get a demand for additional funds to be posted? $1.6676 per €. $1.1840 per €. $1.2084 per €. $1.7767 per €.
- You have account receivables: ₤5 m in one year. o InterestUS: 6.10% per annum & InterestUK: 9% per annum o Spot exchange rate: $1.50/£ & Forward exchange rate: $1.46/£ (1-year maturity) o Put option strike price: $1.46/£ & Put option premium: $0.02/£ How much will you receive in $ if you use the money market hedge?What is the market value of Beril Gıda A.Ş.'s bond with a nominal value of USD 12,000, maturity of 5 years and an annual interest payment of 25%, when the desired rate of return is 25%? a) 18000b) 15000c) 12000d) 16000e) 24000Currently the short term (1 to 12 month) borrowing rate is 3.50% per year and the lending rate over the same period is 0.50% per year. Which of the following implied repo rate per year for a six month futures contract will allow you an arbitrage opportunity? Assume no other transaction cost. O 3.25% O 0.25% O 3.00% O 2.75% O All of these 277