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Question 1 of 14
1. Question
What will be semiannual effective rate?
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Question 2 of 14
2. Question
What will be monthly effective rate?
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Question 3 of 14
3. Question
What will be quarterly rate?
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Question 4 of 14
4. Question
Continuously compounded rate?
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Question 5 of 14
5. Question
Assuming we have 9% semiannually compounded rate. Calculate continuously compounded rate?
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Question 6 of 14
6. Question
When the bond is trading is at par, coupon will be equal to spot rate?
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Question 7 of 14
7. Question
Suppose we have a bond with $100 as face value for 1.5 years with 10% semiannual 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 
Question 8 of 14
8. Question
Which of the following statements is/are correct?
 Treasury rates are considered as riskfree 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 traderâ€™s opportunity cost of capital
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Question 9 of 14
9. Question
Suppose we have 4 years spot rate as 5%, and 5years spot rate as 7%. Calculate 1 year forward rate 4 years from now?
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Question 10 of 14
10. Question
Investor A has entered FRA. Spot rate for LIBOR are 3% & 4% for 1 and 2 years. Investor will pay 6% (compounded semiannually) between 1 & 2 year. Principal Amount is $100M. Calculate value of FRA
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Question 11 of 14
11. Question
Which of the following is incorrect about FRA?
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Question 12 of 14
12. Question
Suppose we have 6 months, 12 months, 18 months and 24 months spot rate as 5%, 6%, 6.5% and 7% respectively. What is 2year par yield?
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Question 13 of 14
13. Question
Spot rate for 1 year and 1.5 year are 5% and 6% respectively with continuous compounding.
If party A is receiving 10% semiannually compounded for FRA starting for a 6month period starting from 1 year now. Determine value of FRA for party A with notional principal is $1M
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Question 14 of 14
14. Question
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.
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