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What will be semi-annual effective rate?CorrectIncorrect
What will be monthly effective rate?CorrectIncorrect
What will be quarterly rate?CorrectIncorrect
Continuously compounded rate?CorrectIncorrect
Assuming we have 9% semi-annually compounded rate. Calculate continuously compounded rate?CorrectIncorrect
When the bond is trading is at par, coupon will be equal to spot rate?CorrectIncorrect
Suppose we have a bond with $100 as face value for 1.5 years with 10% semi-annual compounding.
Determine the price of bond using spot rates mentioned below:
Maturity Spot Rate 0.5 4% 1 4.1% 1.5 4.2%CorrectIncorrect
Which of the following statements is/are correct?
- Treasury rates are considered as risk-free rates.
- Repo rate is the price difference arising in between buying and selling of security of a repo agreement.
- discrete compounding rates are greater than continuous compounding rates
- LIBOR better reflects a trader’s opportunity cost of capital
Suppose we have 4 years spot rate as 5%, and 5-years spot rate as 7%. Calculate 1 year forward rate 4 years from now?CorrectIncorrect
Investor A has entered FRA. Spot rate for LIBOR are 3% & 4% for 1 and 2 years. Investor will pay 6% (compounded semi-annually) between 1 & 2 year. Principal Amount is $100M. Calculate value of FRACorrectIncorrect
Which of the following is incorrect about FRA?CorrectIncorrect
Suppose we have 6 months, 12 months, 18 months and 24 months spot rate as 5%, 6%, 6.5% and 7% respectively. What is 2-year par yield?CorrectIncorrect
Spot rate for 1 year and 1.5 year are 5% and 6% respectively with continuous compounding.
If party A is receiving 10% semi-annually compounded for FRA starting for a 6-month period starting from 1 year now. Determine value of FRA for party A with notional principal is $1MCorrectIncorrect
Read the following statements and choose the correct option.
Statement 1: Expectations theory assumes that forward rates are greater than expected future spot rates.
Statement 2: Liquidity preference theory assumes that forward rates equal expected future spot rates.CorrectIncorrect