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explain the sovereign risksovereign risk denotes a country imposing exchange restrictions on a currency included in a swap making it expensive or not
explain exchange rate riskexchange-rate risk denotes to the risk the swap bank faces from fluctuating exchange rates throughout the time it takes the
explain the basis riskbasis risk considers to the floating rates of two counterparties being pegged to two dissimilar indices in this situation
explain interest rate risk interest rate risk considers to interest rates changing not favorably before the swap dealer can lay off with an opposing
how does the theory of comparative advantage relate to the currency swap marketanswer name recognition is very important in the international
define the basic motivations for a counterparty to enter into a currency swap answer one major reason for a counterparty to enter into a
describe the difference between a parallel loan and a back-to-back loananswer a parallel loan contains four parties one mnc multinational
what is the essential condition for a fixed-for-floating interest rate swap to be possiblefor a fixed-for-floating interest rate swap to be feasible
explain swap dealera swap dealer is a market maker of swaps and predicts a risk position in matching opposite sides of a swap and in making sure that
define swap brokera swap broker arranges a swap among two counterparties for a fee with no taking a risk position in the
suppose spot swiss franc is 07000 and the six-month forward rate is 06950 what is the minimum price which a six-month american call option along
suppose todays settlement price on a cme dm futures contract is 06080dm you comprise a short position in one contract your margin account at present
list the arguments variables of which a fx call or put option model price is a function how does the call and put premium change with respect to
what is meant by the terms that an option is in- at- or out-of-the-moneyanswer a call or put option with st gt e e gt st is considered to as
what is the major difference in the obligation of one with a long position in a futures or forward contract in comparison to an options
how can the fx futures market be used for price discoveryanswer to the amount that fx forward prices are an unbiased predictor of future spot
why are most futures positions closed out through a reversing trade rather than held to deliveryanswer in forward markets almost 90 of all
define hedger - market participantsa hedger desires to prevent price variation by locking in a purchase price of the underlying asset by a long
explain speculator - market participantsa speculator attempts to profit from a modification in the futures price for doing this the speculator will
explain the basic differences between the operation of a currency forward market and a futures marketanswer the forward market is an otc market
why do you think the empirical studies as regards factors influencing equity returns mainly showed that domestic factors were more significant than
why might it be very simple for an investor desiring to diversify his portfolio internationally to buy depository receipts as compared to the actual
discuss any advantages you can think of for a company to 1 cross-list its equity shares on much more than one national exchange2 to source new equity
compare and contrast the various types of secondary market trading structures answer there are two major types of secondary market trading
as an investor what factors would you consider before investing in the emerging stock market of a developing countryanswer an investor in