Suppose That the Risk-Free Rates in the United States and in the United

question 6

Multiple Choice

Suppose that the risk-free rates in the United States and in the United Kingdom are 5% and 4%,respectively.The spot exchange rate between the dollar and the pound is $1.80/BP.What should the futures price of the pound for a one-year contract be to prevent arbitrage opportunities,ignoring transactions costs?

• A)$1.62/BP
• B)$1.72/BP
• C)$1.82/BP
• D)$1.92/BP
• E)none of the above

Identify typical interviewer errors and effective interview preparation strategies.

Recognize the importance of soft and hard skills in the job market according to employer views.

Comprehend different types of interviews and their purposes.

Identify key considerations and preparation tips for phone and virtual interviews.

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Definitions:

Lottery

A form of gambling involving the drawing of numbers at random for a prize, often regulated by governments.

Subordinated Debentures

Debentures that have claims on assets, in the event of bankruptcy, only after senior debt as named in the subordinated debt’s indenture has been paid off. Subordinated debentures may be subordinated to designated notes payable or to all other debt.

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity.

Second Mortgage Bonds

A type of bond secured by a second-priority claim on the collateral that has already been pledged for another bond.