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Question 128  debt terminology, needs refinement

An 'interest payment' is the same thing as a 'coupon payment'. or ?


Question 191  NPV, IRR, profitability index, pay back period

A project's Profitability Index (PI) is less than 1. Select the most correct statement:



Question 207  income and capital returns, bond pricing, coupon rate, no explanation

For a bond that pays fixed semi-annual coupons, how is the annual coupon rate defined, and how is the bond's annual income yield from time 0 to 1 defined mathematically?

Let: ##P_0## be the bond price now,

##F_T## be the bond's face value,

##T## be the bond's maturity in years,

##r_\text{total}## be the bond's total yield,

##r_\text{income}## be the bond's income yield,

##r_\text{capital}## be the bond's capital yield, and

##C_t## be the bond's coupon at time t in years. So ##C_{0.5}## is the coupon in 6 months, ##C_1## is the coupon in 1 year, and so on.



Question 310  foreign exchange rate

Is it possible for all countries' exchange rates to appreciate by 5% in the same year, including the USD? or ?


Question 393  real option, option

A timing option is best modeled as a or option?


Question 585  option

A man just sold a call option to his counterparty, a lady. The man has just now:



Question 598  future, tailing the hedge, cross hedging

The standard deviation of monthly changes in the spot price of lamb is $0.015 per pound. The standard deviation of monthly changes in the futures price of live cattle is $0.012 per pound. The correlation between the spot price of lamb and the futures price of cattle is 0.4.

It is now January. A lamb producer is committed to selling 1,000,000 pounds of lamb in May. The spot price of live cattle is $0.30 per pound and the June futures price is $0.32 per pound. The spot price of lamb is $0.60 per pound.

The producer wants to use the June live cattle futures contracts to hedge his risk. Each futures contract is for the delivery of 50,000 pounds of cattle.

How many live cattle futures should the lamb farmer sell to hedge his risk? Round your answer to the nearest whole number of contracts.



Question 816  expected and historical returns

If future expected cash flows rise, and future required returns remain the same, then prices will , or remain the ?


Question 836  VaR, no explanation

The 95% daily VaR corresponds to the result on the:



Question 910  money market

Which of the following is NOT a money market security?