If Japanese Yen Floating Rates Are Well Below US Dollar

question 19

Multiple Choice

If Japanese yen floating rates are well below US dollar floating rates, then a fairly-priced basis swap that exchanges Japanese floating rates (plus a spread) for US floating rates must have

• A) a positive spread to compensate for the lower Japanese interest rates.
• B) a negative spread to compensate for the likely appreciation of the yen against the dollar.
• C) zero spread.
• D) Any of the three are possible.

Recognize the enhancement of visual reporting tools through the combination with databases and imagery technologies.

Comprehend the use and significance of sequencing illustrations in depicting processes, procedures, and relationships.

Appreciate the ethical considerations and techniques for proofreading visuals to avoid errors.

Identify key considerations for effective report writing beyond accuracy.

---

Definitions:

Corner-point Method

A mathematical technique used in linear programming to find the optimum solution by evaluating the objective function at each corner point of the feasible region.

Dual Values

In linear programming, dual values represent the amount by which the objective function of an optimization model would improve with a one-unit increase in the right-hand side value of a constraint.

Objective Function

A mathematical expression that defines the goal of an optimization problem, e.g., to maximize profits or minimize costs.

Solved

A situation or problem that has been resolved, answered, or dealt with successfully.