N 494 - Study guides, Class notes & Summaries

FIN 494 Exam Prepared 4 - 2020 Question 1 1. The main principle for pricing interest-rate swaps can be generally formulated as: Spot and forward rates much be equal when the swap is first originated Present Values of fixed and floating rate payments must be equal at any time Present Values of fixed and floating payments must be equal when the swap is originated Fixed-rate and floating-rate payments must be equal 10 points Question 2 1. Analyze a two-year swap agreement to exchange LIBOR...

FIN 494 Exam Prepared 5_2020 Question 1 1. Which of the following statements is true? If interest rate is positive and the stock pays no dividends then it is better to keep an American call option alive than to exercise it even if it is far in the money It never makes sense to exercise an American put option early If a European option is priced below its lower bound, then the arbitrage includes borrowing at the risk-free rate Put-call parity holds for Amer...

FIN 494 Exam Prepared 7_Graded A Question 1 1. Which Greek shows the sensitivity of option price to the volatility of the underlying stock? a. Delta b. Gamma c. Vega d. Theta 10 points Question 2 1. If the implied volatility of an option is lower than your expectation of future stock volatility, you would be more likely to conclude that the option is a. Underpriced because the observed price of the option is lower than you...

FIN 494 Final Exam Prepared_2020 @3,4,6 10check 15 Exchange rate is currently $0.7 US per 1 Canadian Dollar. Interest rate is 2% in the US and 1% in Canada. A bank is short a futures contract on 1,000,000 Canadian Dollars with F= $0.75 per unit, maturing in one year. What position should the bank take to hedge the currency risk? Delta is position size discounted by the foreign interest rate. It should be negative because the bank is short. Delta = - 1,000,000 / 1.01 = -990,099 To ...

FIN 494 Exam Prepared 3_2020 Question 1 1. The S&P 500 futures has a multiplier 250. What is the delta of a long position in ten futures contracts? +1 +250 +2,500 +25,000 10 points Question 2 1. S&P 500 is now at 2,000. Ignore interest rate (assume everything is given in PV terms). Suppose you short a $20M portfolio with a beta of 0.8. Find the delta of your portfolio. 8,000 10,000 -8,000 ...

FIN 494 Homework 4 Solutions_2020 Problem 1 Company X, which is a chemical manufacturer, uses crude oil and buys it in the spot market on a monthly schedule. A crude oil swap is quoted by the dealer at $25. Which of the following statements is correct? a. The company should sell the swap to hedge b. In a month when the spot price of oil is above $25, the company will pay the difference to the counterparty c. In a month when the spot price is below $25, the company will pay the differe...

Test Bank Safe Maternity and Pediatric Nursing Care 2nd Edition Linnard-PalmerTable of Contents Chapter 1. Introduction to Maternity and Pediatric Nursing ..................................................................... 2 Chapter 2. Culture ....................................................................................................................................... 15 Chapter 3. Women’s Health Promotion Across the Life Span ..........................................................

Test Bank Memmlers Structure and Function of the Human Body 12th Edition CohenContents Chapter 01: Introduction to the Body.................................................................................................................................................... 1 Chapter 02: Chemistry of Life ............................................................................................................................................................... 26 Chapter 03: Cells .................

Exam (elaborations) TEST BANK FOR The Chemistry Maths Book 2nd Edition Numbers, variables, and units 1 1.1 Concepts 1 1.2 Real numbers 3 1.3 Factorization, factors, and factorials 7 1.4 Decimal representation of numbers 9 1.5 Variables 13 1.6 The algebra of real numbers 14 1.7 Complex numbers 19 1.8 Units 19 1.9 Exercises 29 2 Algebraic functions 31 2.1 Concepts 31 2.2 Graphical representation of functions 32 2.3 Factorization and simplification of expressions 34 2.4 Inverse func...

Exam (elaborations) TEST BANK FOR An Introduction to Modern Astrophysics By Carroll B.W. and Ostlie D.A. (Solution manual) CHAPTER 1 The Celestial Sphere 1.1 From Fig. 1.7, Earth makes S=P˚ orbits about the Sun during the time required for another planet to make S=P orbits. If that other planet is a superior planet then Earth must make one extra trip around the Sun to overtake it, hence S P˚ D S P C 1: Similarly, for an inferior planet, that planet must make the extra trip, or S ...