Short note on derivatives.

Q: rence rat

A: Introduction :  In simple words, Reference rate can be understood as the rate that is utilized to…

Q: Which of the following is most accurate about interest rate swaps?

A: EXPLANATION:- An interest rate swap is a type of rate of interest derivatives in finance. It entails…

Q: Describe about different types of investment derivatives.

A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…

Q: Explain quoted interest rate

A: Quoted interest rate: It is other ways known as nominal interest rate or annual percentage rate and…

Q: Define term structure of interest rates

A: The term structure of interest rates generally alluded to as the yield curve, portrays the coupon…

Q: Distinguish between (2) spot and futures markets

A: A financial market is the market where financial assets are created and traded. Financial assets are…

Q: Formula for interest rate parity?

A: Interest Rate Parity: It is the technique used to govern the relation between currency exchange rate…

Q: Explain accounting for derivatives.

A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…

Q: Can you explain what is Principles of Interest Rate Structure? and how do you do it

A: We assume the question refers to the Term Structure of Interest Rates.  Term structure describes the…

Q: What is an interest rate swap?

A: Swap is a derivative instrument where two parties agree to exchange payment responsibility on two…

Q: Explain Interest Rates and Inflation Expectation?

A: An interest rate is the measure of cash a bank or creditor charges for right of entry to cash. The…

Q: summarizes the types of derivatives based on the NCREIF Index thatare available through Credit…

A: The question is based on the concept of real estate derivatives based on the National Council of…

Q: Why the financial instruments do often called derivatives?

A:

Q: What is interest rate parity?

A: Interest rate parity: Interest rate parity is a theory concerning the association among spot…

Q: Explain NCREIF Index Derivatives Issued by Credit Suisse?

A: The National Council of Real Estate Investment Fiduciaries Property Index (NCREIF)gives an exclusive…

Q: Illustrate Derivatives?

A: Answer: A derivative is described as an investing technique defined to help the financial expert…

Q: Some financial instruments are called derivatives. Why?

A:

Q: Define derivatives

A: In Finance there are derivative contracts that derive its value from the underlying asset. This…

Q: Briefly explain the following a. Relation between present value and interest rate

A: Present value = Applying time value to the future cash flows using interest rates Present Value =…

Q: Spot market Futures market Over the counter market Forwards markets

A: Commodity market are very important for determining the prices of commodities.

Q: How are derivatives recorded?

A: Derivatives:   Derivatives are some financial instruments which are meant for managing risk and…

Q: What is a swap? Describe the mechanics of a fixed-rate swap and a floating-rateswap.

A: SwapsAn agreement amongst 2 counterparties i.e parties, a financial institution for the exchange of…

Q: What are the implications of interest rate parity theorem.

A: Interest rate Parity:- The interest rate parity (IRP) theory states that the difference between the…

Q: What is the effect on interest of an interest rate swap?

A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…

Q: Define Interest rate swaps.

A: Derivatives: Derivatives are some financial instruments that are meant for managing risk and…

Q: 1. How are interest rates determined? Discuss and explain the interest rate equation and its…

A: Interest rate can be defined as the price that lenders charge for lending their money to borrowers.…

Q: Discuss the relative volatility of short- and long-term interest rates.

A: Short-term interest rates refer to the rates that are assigned for a period of 12 months or less.…

Q: sly. What is the effective interest rate e

A: Introduction: Effective interest rate also known as effective annual rate(EAR)  is the interest that…

Q: What differentiates a Total Return Swap (TRS) from a Loan Portfolio Swap (LPS)?

A: Swap-  A swap is an agreement between two counterparties to exchange financial instruments or…

Q: Please define the “Interest Rate Parity Theorem” and explain the equation which describes it.

A: An interest rate parity theory is defined as an interest rate differential, which is between the two…

Q: Assess the use of interest rate options, including swap options

A: Options are referred as the financial derivatives, which used to giver the purchasers the right, but…

Q: How are derivatives reported on the balance sheet? Why?

A: Derivatives: Derivatives are some financial instruments which are meant for managing risk and…

Q: Describe the mechanics of a fixedrate to floating-rate swap.

A: Under an interest rate swap agreement, one stream of interest payments is exchanged for another by…

Q: What are the economic benefits of derivatives? Provide at minimum there benefits. Explain each

A: Derivatives are financial instruments or contracts between 2 or more parties which derive their…

Q: Using an example, explain how an interest swap works.

A: Solution- Statement-Interest swaps work  Swap-  Swap may be a forward contract painted by a…