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Multiple Choice

Please see the attached file.

1.When foreign government issues bonds in a different currency, the interest rate on these bonds depends on

a. Taxes
b. The currency in which they are denominated
c. Regulatory barriers
d. Signalling effects
e. None of the above

2. Determine the beta of the portfolio consisting of the following stocks.

Security % invested Beta
REM 30% 1.1
ACX 20% 0.95
BGB 40% 1.2
CRY 10% 0.7
a. 0.99
b. 0.92
c. 1.07
d. 1.17
e. None of the above

3. Suppose you observe that the current spot price of gold is $460 per ounce, the 1-year forward price is $490 per ounce, and the risk free interest rate is 6% per year. What is the implied storage cost?

a. 0.00522
b. 0.052
c. 0.065
d. 0.035
e. None of the aboe

4. If the forward price exceeds the exercise price, the price of the call ___________ the price of the put; if the forward price is less than the exercise price, the price of the put ___________ the price of the call.

a. Exceeds; exceeds
b. Exceeds: is less than
c. Is less than; exceeds
d. Is less than; does not differ from
e. None of the above

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1.When foreign government issues bonds in a different currency, the interest rate on these bonds depends on

a. Taxes
b. The currency in which they are denominated
c. Regulatory barriers
d. Signalling effects
e. None of the above

The interest rate would depend on the local rates in the market in which the bonds are offered

2. Determine the beta of the portfolio consisting of ...

Solution Summary

The solution explains some multiple choice questions in finance

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