Give two reasons why credit swaps have been the fastest-growing form of swaps in recent years.
Answer to relevant QuestionsA bank purchases a six- month $ 1 million Eurodollar deposit at an interest rate of 6.5 percent per year. It invests the funds in a six- month Swedish krona bond paying 7.5 percent per year. The current spot rate of U. S. ...Answer the following. a. What is the duration of a 20-year 8 percent coupon (paid semiannually) Treasury bond (deliverable against the Treasury bond futures contract) selling at par? b. What is the predicted impact on the ...An FI has a $ 100 million portfolio of six-year Eurodollar bonds that have an 8 percent coupon. The bonds are trading at par and have a duration of five years. The FI wishes to hedge the portfolio with T-bond options that ...What is the difference between loans sold with recourse and without recourse from the perspective of both sellers and buyers?What is prepayment risk? How does prepayment risk affect the cash flow stream on a fully amortized mortgage loan? What are the two primary factors that cause early payment?
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