Tutorial 6 Flashcards by John MacRae

Q

1 tailed CI: 95%

A

1.645

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Q

1 tailed CI: 99%

A

2.33

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Q

Money Market Hedge methodology

A

Now
> Borrow the present value of the receivable in foreign currency
> convert loan principle into domestic currency
At maturity
> Use receivable to pay of principle plus interest
convert to FV to compare with forward contract

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Q

A

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