An overnight repurchase agreement has a party providing US Treasury securities for 98.5500 with a repurchase price of 98.5750. What is repo rate
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An overnight repurchase agreement has a party providing US Treasury securities for 98.5500 with a repurchase price of 98.5750. What is repo rate
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- A German MNC, exports to, and imports from Australia. The MNC has accounts receivable totaling AUD178 million, accounts payable of AUD183 million and AUD-denominated debt of AUD95 million. Its transaction exposure denominated in Euros is: O a EUR90 million O b. -EUR100 million O. None of the options in this question are correct O d. EUR266 million"When a company uses put options to hedge foreign currency firm commitments, the accounting is relatively simple. The company records the cost of the option as an expense on its income statement. Then, when the contract expires, any difference between the strike price and the actual market price is recorded as a gain or loss on the income statement." Can you please illustrate the statement with an example of when the contract falls between two fiscal years?Question 5?
- Which one of the following statements is NOT correct? a) A repurchase agreement is the sale of a non-monetary asset together with an agreement to repurchase it a specified future date b) The difference between the price at which a commercial bank sells an asset to the central bank and the price at which it agrees to buy it back can be expressed as an annualized percentage of the selling price, and this is called the refinancing rate c) In the UK the refinancing rate is known as the repo rate d) If the central bank raises its refinancing rate then the commercial banks will try to increase their lendingThe Interest rate on which of the following is the LIBOR? a. Bankers' acceptances b. Repurchase agreement c. Certificate of Deposits d. Eurodollar CDOMR is quoted against USD and EURO. Under which of the following condition will the trader have a possibility of arbitrage? a. When the calculated cross rate of USD/EURO is different from Quoted cross rate b. When calculated cross rate of OMR/EUR is different from Quoted cross rate c. When calculated cross rate of OMR/USD is greater than quoted rate d. When calculated cross rate of USD/EUR is equal to Quoted cross rate Which of the following is true about derivatives? a. Value of derivative is derived from predetermined asset b. The terms and conditions are flexible under derivative trading c. Derivative markets are suitable for low risk investors d. Risk on derivatives market are always low Which of the following condition may indicate that OMR has depreciated to EUR? a. Spot rate of EUR/OMR is equal to future rate of OMR/EUR b. Spot rate of EUR/OMR is less than future rate of EUR/OMR c. None d. Future rate of EUR/OMR is equal to spot rate…
- The entity sold its inventory to a foreign entity with credit term of n/60. On the 60th day from invoice, the entity accepted the $200 payment from a client. It converted this amount on the spot rate. The entity's approach to the foreign exchange risk is A. AvoidanceB. MitigationC. AcceptanceIcebreaker Company (a U.S.-based company) sells parts to a foreign customer on December 1, 2020, with payment of 16,000 dinars to be received on March 1, 2021. Icebreaker enters into a forward contract on December 1, 2020, to sell 16,000 dinars on March 1, 2021. The forward points on the forward contract are excluded in assessing hedge effectiveness and are amortized to net income using a straight-line method on a monthly basis. Relevant exchange rates for the dinar on various dates are as follows: Date Spot Rate Forward Rate(to March 1, 2021) December 1, 2020 $ 3.40 $ 3.475 December 31, 2020 3.50 3.600 March 1, 2021 3.65 N/A Icebreaker must close its books and prepare financial statements at December 31. a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency receivable, prepare journal entries for the sale and foreign currency forward contract in U.S. dollars. a-2. What is the impact on…A U.S. firm has a £100,000 payable with a 3-month maturity. To hedge the payable, it will take a short position in a forward contract True or False?
- A trasury security in which periodoc coupon interest payments can be seperate from eachother ad from the orinciple payment is called a: A. STRIP B. T-notes C. T-Bonds D. G. O. Bond E. Revenue bond2) XYZ has cash of FC 100,000 on both April 30 and May 31, 2010. The applicable spot rates for April 30 and May 31 are as follows: April 30: 1US = 5FC May 31: 1 US= 4FC How much is the FX transaction gain or loss on May 31, 2010.Suppose a bank enters a repurchase agreement in which it agrees to sell Treasury securities to a correspondent bank at a price of $9999827 with the promise to buy them back at a price of $10000090. Calculate the yield on the repo if it has a 5-day maturity.