An FI Portfolio Manager Holds 10-Year $1 Million Face Value

question 72

Multiple Choice

An FI portfolio manager holds 10-year $1 million face value bonds.At time 0, these bonds are valued at $95 per $100 of face value and the manager expects interest rates to rise over the next three months.What should the manager do?

• A)The FI portfolio manager should leave the position untouched as changes in the interest rate have no impact on bond prices.
• B)The FI portfolio manager should leave the position untouched as an increase in interest rates will lead to higher bond prices.
• C)The FI portfolio manager should hedge the position by selling a three months forward contract with a face value of $1 million.
• D)The FI portfolio manager should hedge the position by buying a three months forward contract with a face value of $1 million.

Understand the principles behind memory encoding, storage, and retrieval processes.

Acknowledge the reliability issues of eyewitness testimonies due to memory distortion.

Distinguish between anterograde and retrograde amnesia and their implications for memory.

Recognize the impact of psychological research on understanding memory processes and disorders.

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Definitions:

Enter Bills

The process in accounting software where incoming invoices from suppliers are recorded ahead of payment.

Purchase Order

A document issued by a buyer to a seller, formalizing the terms of a purchase of goods or services.

Accounts Payable

The amount of money that a company owes to its creditors for goods or services received but not yet paid for.

Expense Account

An account that tracks the costs incurred by a business as part of its operating activities.