Comment on the relationship between expense ratios and passive investing.

 

Identify what style of market index an investor should focus on and explain why.

 

Explain the relationship between the strength/weakness of the US dollar and oil prices.

 

An investor would like to purchase a $1000 par value, 5-year, 5% bond, which pays coupons quarterly. Calculate the expected price if the market rate for a similar 5-year bond is 4.80%.

 

Field Industries' outstanding bonds have a 7.70% coupon and $1,000 par value. Their nominal yield to maturity is 9.25% on similar bonds, they pay interest semiannually, and they sell at a price of $850. How long is the maturity in years?

 

31.Explain the risk in buying a bond that has fallen significantly but has a wide bid-ask spread.

(2 Points)

 

32.What would the reserve requirement rate need to be for the Central Bank to create 125,000 in money supply from a 10,000 deposit?

(2 Points)

 

33.An investor is willing to pay $80.00 for a preference share with a required rate of return of 7.5%. How much in dividends does the share pay per year?

 

Describe one strategy for managing a bond portfolio assuming the yield curve will remain stable.

 

Describe one strategy for managing a bond portfolio assuming the yield curve will change.

 

Explain how a yield curve inversion affects banks.

 

Explain the incentive for complying with GIPS if it is voluntary.

 

The right to purchase an asset before a specific date is known as

 

Assume it is January 1. A client needs a loan on May 1 that would expire in November. Describe the appropriate FRA and explain why both the buyer and seller of the FRA would agree to the contract.

 

An exchange traded agreement to buy or sell an asset at a specific date in the future is known as:

 

An agreement between two parties to sell or buy an asset at a specific date is known as a?

 

A US based client has USD to convert to EUR. Identify a derivative instrument that can be potentially used with a European-based client operating in the US and explain how it works.

 

A company will pay a dividend of $1.06 next year. The company keeps 35% of its income and has a return on equity of 7%. The company has a beta of 1.7 while government bonds pay 4% and the stock market averages 10%.

Calculate the intrinsic value of the company.

Answer rating: 100% (QA)

a The relationship between expense ratios and passive investing Passive investing involves investing in a portfolio that tracks a market index such as the SP 500 with the goal of matching its performa... View the full answer