The US Govemment wanted to auction $600 million worth of 1-year Treasury Bills. Bidsfor $100 million worth of Treasury Bills were submitted on a non-competitive basis.InstitutionAmount BiddedPriceBank 1$100 m$50 m$150 m$50 m$100 m$100 m$175 m98.0Bank 297.5Bank 397.096.5Bank 4Bank 596.0Bank 695.5Bank 795.0(a)Based on the competitive bids submitted, describe, using a table, how youdetermine the price:(i)(11The stopped-out priceThe allocations to banks 4, 5 and 6 (b)You have $1,000 to invest for two years and have two choices:Altemative 1: 2-year zero coupon bond selling at a price of 92.Altemative 2: A bank deposit which pays according to the following rates:1 year spot rate3 year spot rate1 year forward rate two years from now3.0%4.5%4.0%Analyse the altematives to determine the amount received from each alternativeat the end of two years. (Give answer to nearest dollar)

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The US Govermment wanted to auction $600 million worth of 1-year Treasury Bills. Bids for $100 million worth of Treasury Bills were submitted on a non-competitive basis. Institution Amount Bidded Price Bank 1 $100 m 98.0 Bank 2 $50 m $150 m $50 m $100 m $100 m $175 m 97.5 Bank 3 97.0 Bank 4 96.5 Bank 5 96.0 Bank 6 95.5 Bank 7 95.0 (a) Based on the competitive bids submitted, describe, using a table, how you determine the price: (i) The stopped-out price (ii) The allocations to banks 4, 5 and 6

The US Govermment wanted to auction $600 million worth of 1-year Treasury Bills. Bids for $100 million worth of Treasury Bills were submitted on a non-competitive basis. Institution Amount Bidded Price Bank 1 $100 m 98.0 Bank 2 $50 m $150 m $50 m $100 m $100 m $175 m 97.5 Bank 3 97.0 Bank 4 96.5 Bank 5 96.0 Bank 6 95.5 Bank 7 95.0 (a) Based on the competitive bids submitted, describe, using a table, how you determine the price: (i) The stopped-out price (ii) The allocations to banks 4, 5 and 6

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A U.S. corporation has purchased currency put options to hedge a 100,000 Canadian dollar (CAD) receivable. The premium is $0.01 per CAD and the exercise price of the option is $0.75 per CAD. If the spot rate at the time of maturity is $0.85 per CAD, what is the net amount of US dollar received by the corporation if it acts rationally, A) $74,000. B) $84,000. C) $75,000. D) $85,000.
Case 2. Honda Phil. is a subsidiary of Honda Japan. The functional currency of Honda Phil. is peso while the presentation currency of its parent, Honda Japan is yen. For the year ended December 31, 2020, Honda Phil. has the following foreign currency denominated assets: Accounts Receivable of $1,000 and Prepaid Asset of $100. The historical rates of Accounts receivable and Prepaid asset are $1=P30 and $1=P20 and P1=2Yen and P1=4Yen, respectively. The exchange rate on December 31, 2020 is 1$=40 and P1=3Yen. 2. In the separate statement of financial position of Honda Phil. on December 31, 2020, what is the book value of accounts receivable and prepaid asset, respectively? 3. what is the book value of accounts receivable and prepaid asset, respectively, in the Consolidated Statement of Financial Position of Honda Japan?
(b) Jackton Company limited is a UK firm that has bought goods from a US Supplier and must pay US $4 million in three month time. The company finance director wishes to hedge against the foreign exchange risk and is considering 3 methods. Using forward exchange contract Using the money market hedge Using lead payment The annual interest rate and exchange rates are given below; US S UK £ Deposit Rate 1 month 7% Borrowing rate 10.25% Deposit Borrowing 10.75% 3 month 7% 10.75% 4% 14% 4.25% Spot rate £:1 : $ 1.8625 1.8635 1 month forward 0.6-0.58 cents premium 3 months forward 1.80 1.75 cent premium Advice the company on the best method to use. (Show all your workings) [12 marks]
Suppose IBM receives quotes of USD 0.008170-7 for the Japanese Yen ( JPY). What is the JPY value to IBM of buying USD 5 million? Question 3 Answer a. JPY611,995, 104.04 b. JPY611,471, 199.71 c. There is not enough information in this question d More than one of these options e. JPY611,733, 151.85
I need the answer as soon as possible
Brief, Inc., had a receivable from a foreign customer that is payable in the customer's local currency. On December 31, 2020, Brief correctly included this receivable for 377,500 local currency units (LCU) in its balance sheet at $290,000. When Brief collected the receivable on February 15, 2021, the U.S. dollar equivalent was $301,200. In Brief's 2021 consolidated income statement, how much should it report as a foreign exchange gain? Multiple Choice $16,200 $27,400 $0 $11,200
On December 31, 2001 Historic Bank had long positions of 200,000,000 Japanese Yen and 50,000,000 Swiss Francs. The closing exchange rates were ¥92/$ and SF 1.89/$. (keep 4 decimal places in your computation) Question 1 : What is the value of delta in dollars for Japanese Yen position? Question 2 : What is the value of delta in dollars for Swiss Francs position? Question 3 : Over the past 500 days, the 25th worst day for adverse exchange rate changes saw a change in the exchange rates of 0.78 percent for the Yen and 0.30 percent for the Swiss Franc. What is the expected VAR exposure on December 31?
The example below will highlight the Dutch auction process for U.S. government securities. Assume the following bids were received by the BFS for a planned issue of $1,000,000 of 13-week T-Bills. Non-competitive Bids A total of 6 non-competitive bids amounting to $200,000 was received. Competitive Bids A total of five competitive bids was received. a. $250,000 at 3.1% b. $300,000 at 3.0% c. $175,000 at 2.9% d. $300,000 at 2.8% e. $200,000 at 2.7% Since only $800,000 will be allocated to the competitive bidders, the selection will begin at the bottom at 2.7% and move up till the desired amount is reached. In this example, the rate that clears $800,000 is a. 3.1% b.3.0% c. 2.9% d. 2.8% e. 2.7% a b c d e
An Australian company has decided to issue a 90-day bank-accepted bill domestically to farac adamionar funding of $480000 to buy equipment. If the bank has agreed to discount the bill at a yield of 7.06% per annum, which of the following values will the face value of the bill be closest to? O a. $488472.00 O b. $488355.95 O c. $471787.03 O d. $502664.77 e. $484177.97 O f. $480000.00 g. $478686.48
Dd5.
A. Discuss what could happen if GBC Financial Holdings PLC fails to meet these new requirements. Analyze what GBC Financial Holdings PLC might do to comply with the Basel III standards Asset Amount Cash and equivalents Government securities Interbank loans Mortgage loans Ordinary loans BBB+ - BBB- $5,000,000 AAA - AA- $1,500,000,000 $100,000,000 $2,000,000,000 $300,000,000 $550,000,000 Standby letters of credit $81,000,000
The Treasury plans to issue $125 million of 52-day Treasury Bills using a Dutch auction system. They received $15 million in non-competitive bids. They also received the following competitive bids: Broker-dealer A bids $40,000,000 at 11.70% Broker-dealer B bids $14,000,000 at 11.50% Broker-dealer C bids $18,000,000 at 10.80% Broker-dealer D bids $15,000,000 at 10.50% Broker-dealer E bids $18,000,000 at 9.90% Broker-dealer F bids $17,000,000 at 9.60% At what rate will the auction clear and what amounts do each broker-dealer receive? b) Explain syndicated loans and explain the role of the lead manager.

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