which one is correct please confirm? Q20: Which investment would show the highest rate of return: 1) a six month (180/360 days) deposit at a rate of 4.75% or 2) a six month straight discount bill at a discount rate of 4.60% (180/360)     "A six month deposit is a true

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A: Present Worth calculates the current value of future cash flows or a series of payments, typically…

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A: The risk-free rate refers to the hypothetical rate of return on an investment that carries zero…

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A: The question is based on the application of the time value of money for annuity payments.  Annuity…

Q: Which option yields a higher return? Option A: $50 in 6 months and $50 in 12 months, assuming a…

A: Here,Option A:$50 in 6 Months (n1)$50 in 12 months (n2)Interest Rate (r) is 3%Compounding Period (m)…

Q: You plan to invest $1,000 for one year and you have the opportunity to invest it at a 12 percent…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: A put option on the Bank Nifty with expiry date 30-June-2022 (20 days from now) and Strike Price Rs.…

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Q: 4. continuously-compounded interest rate tree, with the time interval between two movements being A…

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A: Effective rate is the rate after considering the impact of compounding on the interest rate.

Q: %

A: a) The modified duration can be calculated as:   Modified Duration = Duration / (1 + Yield)   Given…

Q: Suppose that at the present time, one can enter 5-year swaps that exchange SOFR for 8%. An off-…

A: Number of years: 5SOFR: 8%Coupon rate to be received: 11%Notional principal: $20 million

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Q: Suppose the 1-year and 2-year OIS rates are 2% and 4%, respectively. Consider an OISswap with two…

A: Dear student, kindly check the answer in the explanation box below.Explanation:Dear student, below…

Q: If the interest rate is 15%, what is the present valueLOADING... of a security that pays you $1100…

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Q: How much would you have at the end of five years if you invested P50,000 at 10.5% interest rate?

A: Future Value: It is the future worth of the present sum of the amount and is computed by…

Q: turity 0.5 1 1.5 2 2.5 3 3.5 Spot 3.5 49 4.5 59 5.5 6 6.5

A: a. Price of the bond Different spot rates are given for maturity period of 0.5, 1, 1.5 and so on.…

Q: You are paying a series of five constant-dollar (or real-dollar) uniform payments of $664.85…

A: The formula used for the computation is:

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A: Dear student, kindly check the answer in the explanation box below.Explanation:Part 1: Answer:The…

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A: Binomial Model

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A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: The one-year spot interest rate is r₁ = 5.4%, and the two-year rate is r2 = 6.4%. If the…

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A: Strike price = $0.50premium = $0.02Future spot rateProbability$0.4620%$0.4830%$0.5250%

Q: A 330-day T-Bill is currently selling at a discount rate of 3.97%. What will be the price of the…

A: The below expression can be used to calculate the current price of T-bill:

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Q: The spot rate: USD 1.21/EUR 2-year USD YTM=0.11% 2-year EUR YTM= -0.72%. Suppose that you invest…

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.