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- Suppose that you have revenues denominated in Japanese Yen expected in 6 months. How would you hedge this risk using money market instruments? How would a money market hedge compare to a forward hedge?Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to Begin Mode, press FV, and find the FV of the annuity due.) Do not round intermediate calculations. Round your answers to the nearest cent. $200 per year for 10 years at 14%. $ $100 per year for 5 years at 7%. $ $200 per year for 5 years at 0%. $ Now rework parts a, b, and c assuming that payments are made…Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to Begin Mode, press FV, and find the FV of the annuity due.) Do not round intermediate calculations. Round your answers to the nearest cent. $800 per year for 10 years at 14%. $ $400 per year for 5 years at 7%. $ $800 per year for 5 years at 0%. $ Now rework parts a, b, and c assuming that payments are made…
- Suppose money invested in a hedge fund earns 1% per trading day. There are 250 trading days per year. With an initial investment of $100, what will be your annual return assuming the manager puts all of your daily earnings into a zero-interest-bearing checking account and pays you everything earned at the end of the year? *Make sure to input all currency answers without any currency symbols or commas, and use two decimal places of precision.You receive an e-mail about a great investment opportunity. The message says you will double your money "in only two years!" What rate of return would be needed for that prediction to come true?(Expected rate of return and risk) B. J. Gautney Enterprises is evaluating a security. One-year Treasury bills are currently paying 4.3 percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security? Probability Return 0.05 −4 % 0.50 1 % 0.40 7 % 0.05 8 % (Click on the icon in order to copy its contents into a spreadsheet.) Question content area bottom Part 1 a. The investment's expected return is enter your response here %. (Round to two decimal places.) Part 2 b. The investment's standard deviation is enter your response here %. (Round to two decimal places.) Part 3 c. Should Gautney invest in this security? (Select the best choice below.) A. No. B. J. Gautney Enterprises should not invest in this investment because the return is lower than the Treasury bill and the level of risk higher than the Treasury bill. B. Yes. B. J.…
- Mini Case Overview You are an Assistant Analyst in a financial institution in your Country. Your company is interested in analyzing the behaviour of interest rates and the models used to predict interest rates in the future. As an initial project in this area, you have been assigned the task of creating a presentation that will show, the top management team assigned this project, the basics of what affects interest rates and how equilibrium prices change over time. Your successful presentation to this group is likely to eam you a promotion to an Analyst position within the team. To begin your work, you have decided to identify a series of questions that you think this team will ask, including tables and graphs that will satisfy their concerns about the final presentation to the Chief Financial Officer (CFO). You decided to start by answering the following questions, assuming that the face value of a discount bond is $1,000 and the time to maturity is one year. What is the expected…How do you solve this on a HP 10bII+ financial calculator?(Expected rate of return and risk) B. J. Gautney Enterprises is evaluating a security. One-year Treasury bills are currently paying 4.8 percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security? Probability Return 0.10 −6 % 0.35 4 % 0.45 5 % 0.10 10 % (Click on the icon in order to copy its contents into a spreadsheet.) Question content area bottom Part 1 a. The investment's expected return is enter your response here%. (Round to two decimal places.)
- (Expected rate of return and risk) B. J. Gautney Enterprises is evaluating a security. One-year Treasury bills are currently paying 3.9 percent. Calculate the investment's expected return and its standard deviation. Should Gautney invest in this security? Probability Return 0.20 −5 % 0.50 4 % 0.10 5 % 0.20 8 % (Click on the icon in order to copy its contents into a spreadsheet.) Question content area bottom Part 1 a. The investment's expected return is enter your response here%. (Round to two decimal places.) b. the investment's standard devation is? round 2 decimal places c. should gautney invest in this security?As a newly hired analyst, you are presented the following yields: 1-year 4.6%; 2-year 4.8%; 3-year 4.9%; 4-year 4.8% and 5-year 5.2%. What is the rate on a 1-year treasury Security, 4 years from now?What benefits and negatives to you see with crypto? (CBDC 2022) (Kolakowski 2022) In the age of crypto the public has looked to the FED for their perspective of the creation of a crypto for the U.S. in the form of a Central Bank Digital Currency. The FED describes that a, "CBDC transactions would need to be final and completed in real time, allowing users to make payments to one another using a risk-free asset." This debate is popular with the FED holding an open comment submission earlier this year with the public on the topic! Sadly, the submission period of 120 days has ended but here is the link to the PDF gallery of public comments: Federal Reserve Board - Public Comments (Links to an external site.). What does the group think about a nationally created crypto? (CBDC 2022) A digestion article I recently enjoyed was useful as a guide to the massive original post by the FED here: Money and Payments: The U.S. Dollar in the Age of Digital Transformation (federalreserve.gov) (Links to…