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Question
The yen-per-dollar spot rate is 104. The yen-per-dollar forward rate is 107. If the U.S. risk-free rate is 2.4%, what is the likely yen risk-free rate?A. 1.24%
B. 2.35%
C. 3.98%
D. 5.35%
Answer
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Related questions
Q:
Passive investors with well-diversified international portfolios _________.
A. can safely ignore all political risk in emerging markets
B. can expect very large diversification gains from their international investing
C. do not need to be concerned with hedging exposure to foreign currencies
D. can expect returns to be better than the EAFE on a consistent basis
Q:
Suppose that U.S. equity markets represent about 35% of total global equity markets and that the typical U.S. investor has about 95% of her portfolio invested only in U.S. equities. This is an example of _________.
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D. passive management
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A. default risk
B. foreign exchange risk
C. market risk
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EAFE stands for _______.
A. Equity and Foreign Exchange
B. Europe, Australasia, Far East
C. Europe, Asian, Foreign Exchange
D. Europe, American, Far East
Q:
What is the proper strategy to capture alpha given the following data? A portfolio generates an annual return of 14%, a beta of 1.5, and the market index returns 12%. The risk free rate is 3%.
A. long the index
B. short the portfolio
C. short the index
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Q:
Consider a hedge fund with $200 million at the start of the year. The benchmark S&P 500 Index was up 16.5% during the same period. The gross return on assets is 21%, and the expense ratio is 2%. For each 1% above the benchmark return, the fund managers receive a .1% incentive bonus.
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Q:
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A. pairs trading
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Q:
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II. Merger arbitrage
III. Currency contracts
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B. I and II only
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Q:
A restriction under which investors cannot withdraw their funds for as long as several months or years is called __________.
A. transparency
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Q:
Which of the following typically employ(s) significant amounts of leverage?
I. Hedge funds
II. Equity mutual funds
III. Money market funds
IV. Income mutual funds
A. I only
B. I and II only
C. III and IV only
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Q:
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Q:
WEBS differ from mutual funds in that:
I. WEBS can be shorted.
II. WEBS trade continuously on the AMEX.
III. WEBS are passively managed.
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B. II and III only
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Q:
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Q:
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II. Large trade deficit
III. Large amount of total debt
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B. I and II only
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Q:
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A. 101
B. 102
C. 105
D. 108
Q:
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C. an over hedge
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Q:
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A. Investors; regulators
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Q:
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C. wealthy investors; tax treatment
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Q:
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Q:
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Q:
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B. brokers
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Q:
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Q:
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Q:
If the S&P 500 Index futures contract is overpriced relative to the spot S&P 500 Index, you should __________.
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Q:
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C. buy Treasury-bond futures
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Q:
You are currently long in a futures contract. You instruct a broker to enter the short side of a futures contract to close your position. This is called __________.
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B. a reversing trade
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Q:
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Q:
The current stock price of KMW is $27, the risk-free rate of return is 4%, and the standard deviation is 30%. What is the price of a 63-day call option with an exercise price of $25?A.$2.50B.$2.65C.$2.89D.$3.12
Q:
The option smirk in the Black-Scholes option model indicates that __________.
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C. stock prices evolve continuously in today's actively traded markets
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Q:
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A. 10
B. 30
C. 60
D. 90