1. Are there any spot-forward covered interest rate arbitrage opportunities available in the AUD-USD markets at any horizon? Start with $1M spot, and show the profit/loss for each of the (6) possible round-trip arbitrages. 2. Working in IBM’s Treasury Department, you need to borrow 10M USD for 6 months. Do you prefer to borrow USD directly, or synthetically using the EUR? Ross School of Business, University of Michigan 701 Tappan Street, Room R4434 Ann Arbor, Michigan 48109-1234 Tel 734-764-9286 Fax 760-268-3746 [email protected] http://webuser.bus.umich.edu/ppasquar/ Paolo Pasquariello Professor of Finance LEADING IN THOUGHT AND ACTION 3. Having invested in Japanese Treasury Bonds, you have a 6-month JPY 100M receivable, which you would like to transform into a 6-month USD receivable. Do you prefer an outright forward or a synthetic using the JPY and USD money markets? 4a. You suspect that the negative quotes for Japanese deposit (bid) rates above are another typo from your typo-prone professor. Calculate a synthetic JPY 90-day deposit rate using the US money market to check whether the negative rates are consistent with the other data. Quote your answer in terms of the synthetic deposit rate’s percent return per annum. 4b. What does it mean for interest rates to be negative? Think about the cash flows associated with lending at negative rates. What is the nominal interest rate associated with putting JPY cash under the mattress or in the cookie jar? Inflation in Japan has recently been running at -1%. How does this affect your thinking? 5. Assuming you believe UIRP is right, what is the expected future USD payoff associated with the JPY 100M receivable of Question 3 if you do not hedge your transactions exchange risk? 6. Assuming UH is true, what is your expectation of spot USD/GBP rates 3, 6, and 12 months in the future? 7. Suppose the price level in the US is expected to be $20,000 in one year while the price level in the UK is expected to be £15,000. If you are a believer in APPP, what exchange rate do you forecast for 1 year from now. How does this differ from UH’s forecast? 8. Suppose you don’t know what the price level in the US or Japan, but you know that US inflation is likely to 3% and Japan inflation is likely to be -1% over the next year. What rate of appreciation / depreciation of the JPY do you expect against the USD?

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Homework-2-41….pdfHW2-412-Turke….xlsx

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1. Are there any ways in which Microsoft can reduce the undesirable effects of the law of diminishing returns?

 

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1) analyze the liability structure of the group – instead of looking at the 2004 to 2010 period you can also look at the 2010 to 2017 period for analysis;

2) analyze various ratios that can be established as KPI’s;

3) look a the Euro yield curve over this time period and and determine the central bank policy -was it one of ease due to low inflation for example;

4) identify the risks the Company faces in the management of its finances, in particular any specific liabilities that can be identified;

5) suggest hedges for each risk identified and establish a risk management policy (per the outline on p.171).

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2310379-1-cas….pdf

 

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1.Blue Devil Savings and Loan Association has a large number of 10-year fixed-rate mortgages and obtains most of its funds from short-term deposits. It uses the yield curve to assess the market’s anticipation of future interest rates. It believes that expectations of future interest rates are the major force in affecting the yield curve. Assume that an upward-sloping yield curve exists with a steep slope. Based on this information, should Blue Devil consider using financial futures as a hedging technique? Explain.

 

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1) Based on the feedback received on your Topic 2 assignment Database Schema, provide SQL statements to create the (revised) database and populate it with sample data (at least four rows per table).

2) Modify the database by adding an additional column (“Deleted_Date”) to those tables that represent entities that could contain data which can be deleted and justify your rationale in a short paragraph. In addition, explain what the tradeoffs are in using a marker-column for deletion, as opposed to actually deleting a row from a table?

APA format is not required, but solid academic writing is expected.

This assignment uses a grading rubric. Instructors will be using the rubric to grade the assignment; therefore, students should review the rubric prior to beginning the assignment to become familiar with the assignment criteria and expectations for successful completion of the assignment.

You are not required to submit this assignment to LopesWrite.

 

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