Question: 4. Question 4 [Total: 20 marks] a} Is the expected loss from a default on an interest-rate swap it Less ii) Same iii] Higher than

4. Question 4 [Total: 20 marks] a} Is the expected loss from a default on an interest-rate swap it Less ii) Same iii] Higher than the expected loss from a default on a loan with the same principal? Please choose the correct option and justify your answer. [10 marks] to} A Treasury bond futures price is quoted as 1D3-12. The prioes of three deliverable bonds are quoted as 1 15-0-5, 145-12, and 153-15. Their conversion factors are roars, 1.2264, and 1.6169. respectively. Which bond is cheapest to deliver? {Please show your computations.) [1 ti marks]

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