Fight Finance

(a) 0.3086%

(b) 0.6171%

(c) 0.6181%

(d) 0.6239%

(e) 0.6300%

(a) 9.47%

(b) 8.93%

(c) 8.53%

(d) 7.80%

(e) 7.07%

(a) $913,907.4174

(b) $925,925.9259

(c) $974,611.7471

(d) $987,020.0108

(e) $987,428.5591

(a) 1.180572 AUD per USD

(b) 0.848966 AUD per USD

(c) 0.847047 AUD per USD

(d) 0.755566 AUD per USD

(e) 0.752954 AUD per USD

(a) ##\min(S_T - K, 0)##.

(b) ##-\min(S_T - K, 0)##.

(c) ##\max(K-S_T, 0)##.

(d) ##-\max(K-S_T, 0)##.

(e)##-\max(S_T-K, 0)##.

(a) Prices, ##P_1##.

(b) Gross discrete returns per annum, ##r_{\text{gdr 0 }\rightarrow \text{ 1}} = \dfrac{P_1}{P_0} ##.

(c) Effective annual returns per annum also known as net discrete returns, ##r_{\text{eff 0 }\rightarrow \text{ 1}} = \dfrac{P_1 - P_0}{P_0} = \dfrac{P_1}{P_0}-1##.

(d) Continuously compounded returns per annum, ##r_{\text{cc 0 }\rightarrow \text{ 1}} = \ln \left( \dfrac{P_1}{P_0} \right)##.

(e) Annualised percentage rates compounding per month, ##r_{\text{apr comp monthly 0 }\rightarrow \text{ 1 mth}} = \left( \dfrac{P_1 - P_0}{P_0} \right) \times 12##.

(a) Revenue, sales, turn over.

(b) Paid up capital, contributed equity.

(c) Shares, stock, equity.

(d) Net income, earnings, net profit after tax, the bottom line.

(e) Market capitalisation of equity, book value of equity.

(a) The Macaulay duration of the bond is 22 years.

(b) If yields-to-maturity suddenly fell by 1 percentage point then bond prices would suddenly rise by 20% or more.

(c) If yields-to-maturity suddenly rose by 2 percentage points then bond prices would suddenly fall by 40% or less.

(d) If the bond is a zero-coupon bond then its maturity is 20 years.

(e) The modified-duration-price-change formula assumes parallel shifts in the yield curve.

(a) Trade surplus was roughly zero, so Australians exported as much as they imported.

(b) Net Income was negative, so Australians paid more dividends and interest to foreigners than they received. This is probably because Australia has greater gross foreign liabilities than gross foreign assets.

(c) Current account deficit means Australians have to lend to foreigners by buying foreigners’ debt and equity which represent net capital outflows out of Australia.

(d) Net foreign equity liabilities were negative (less than zero) so Australians had positive net foreign equity assets which means that Australians owned more foreign shares than foreigners owned of Australian shares.

(e) Persistent current account deficit will make its net foreign liabilities greater and greater.

(a) The futures are over-priced.

(b) One future should be sold.

(c) One stock should be sold.

(d) A 2 year zero coupon bond with a face value at maturity of $24 should be sold.

(e) The gain now will be $1.7161 per futures contract with zero cash flows in the future.