All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Hire a Tutor
AI Study Help New

Search
Sign In
Register

study help
business
corporate finance

Questions and Answers of Corporate Finance

What are the drawbacks of the cell-based approach for bond portfolio construction?
Why is it difficult to build a portfolio in pursuing a pure bond indexing strategy?
How can a multi-factor risk model be used to monitor and control portfolio risk?
How can a multi-factor risk model be used to rebalance a portfolio?
In a factor model, what is meant by isolated tracking error?
Answer the below questions.a. Explain whether you agree or disagree with the following statement: “It is the covariance not the correlation that is important in the mean-variance model for
Following is a portfolio consisting of 50 bonds with a market value of $100 million as of April 29, 2011:Describe in detail the risk characteristics of this portfolio. Be sure to discuss where it
What are the two ways in which the Markowitz mean-variance framework has been used by investors?
What are the difficulties of implementing the Markowitz mean-variance framework in constructing portfolios?
What was the purpose for William Sharpe’s development of the single index market model?
Why is the tracking error more important than portfolio variance of returns when a portfolio manager’s performance is measured versus a benchmark?
What is tracking error?
Explain why backward-looking tracking error has limitations for estimating a portfolio’s future tracking error.
Why might one expect that for a manager pursuing an active management strategy that the backward-looking tracking error at the beginning of the year will deviate from the forward-looking tracking
How does the investment risk profile of a corporatebond and that of the common stock of the same company affect the investment philosophyin managing a corporate bond portfolio?
What metric from Moody’s Analytics can be usedto assess the attractiveness of a bond’s spread perunit of expected loss?
Studies have suggested that credit spreads in the market have been observed to be greaterthan what can be justified by default and recoveryrates. Explain how by quantifying liquidityspreads, one can
What does a Barclays Capital Liquidity CostScore of 1.2 mean?
Answer the below questions. (a)For the Barclays Capital Liquidity Cost Scores,how are the bid-ask spreads obtained?(b)What are the limitations of the bid-askspreads used by Barclays Capital to
Answer the below questions. (a)How is the Barclays Capital Liquidity Cost Score calculated for a spread-quoted bonds?(b)How is the Barclays Capital Liquidity Cost Score calculated for a price-quoted
You have been retained by a wealth managementfirm to advise on the selection of a benchmarkfor its client who has made the decision to investin only U.S. investment-grade corporate bonds.One of the
How does a yield-spread pickup trade differ froma credit-upside trade?
What is the motivation for a new-issue swap trade?
Give two examples of a structure trade.
What is meant by constraint-tolerant investing?
What are the implications of findings regardingvarious types of constraint-tolerating investingfor setting an investment policy for corporatebond portfolios?
What are the risks associated with the disposingof a bond issue in an investment-grade corporatebond index after it is downgraded to noninvestmentgrade?
What has been the observed price performance offallen angels after they have been downgraded?
Why in managing a defined benefit pension plan is it necessary for the plan sponsor to pursue a liability-driven solution rather pursue a strategy that focuses only on management of the assets?
Why must an immunized portfolio be rebalanced periodically?
What are the risks associated with a bond immunization strategy?
“I can immunize a portfolio simply by investingin zero-coupon Treasury bonds.” Comment on this statement.
Why is there greater risk in a multi-periodimmunization strategy than a cash flow matching strategy?
You overheard a conversation by trustees of a defined benefit pension plan about how successful they have been in making asset allocation decisions and selecting asset managers. Every year their
Why is the projected value of the liabilities of adefined benefit plan dependent on the discountrate used in the valuation process?
Why is the funding gap of a defined benefit pensionplan referred to as the “unfunded liabilities”?
If the funding gap of a defined benefit pensionplan increases, what happens to the funding ratio?
What are the risks associated with fundinggap risk?
What are the risks associated with the projectedliabilities of a defined benefit pension plan?
How can the interest-rate risk of the projected liabilities of a defined benefit pension plan be measured?
How does a defined benefit pension plan differfrom a defined contribution plan?
Answer the below questions. (a)What are the difficulties of following aduration-matched strategy for hedgingthe interest-rate risk of a defined benefitpension plan?(b)How can interest-rate
“By hedging a defined benefit pension plan’sinterest-rate risk, a sponsor can eliminate pensionrisk.” Comment on this statement.
What alternative LDI solution can be used tomanage a defined benefit pension plan instead ofmanaging just interest-rate risk?
In December 2003, a European insurance company, Swiss Re, issued a 3-year floating-rate bond maturing on January 1, 2007, with a par value of US$400 million. The interest-rate payments were
Answer the below questions.(a) Why is the interest-rate sensitivity of adefined benefit pension plan’s assets and liabilities important?(b) In 1986, Martin Leibowitz wrote a paper titled“ Total
If a defined benefit pension plan has liabilitiesthat are interest-rate sensitive and the plan sponsorallows investment in a portfolio of commonstocks, can you determine what will happen to
The following excerpt is from a January 18, 2008 article (“LDI Strategy that is Liable to Word?”) by Penny Green, Chief Executive of the SAUL Trustee Company (a U.K. that advises on pension
In explaining how a pension fund should transition to a liability-driven investment strategy, Duane Rocheleau, managing director of Northern Trust's global investment solutions team, writes in
What is meant by immunizing a bond portfolio?
Answer the below questions (a)What is the basic underlying principle in animmunization strategy?(b)Why might the matching of the maturity of acoupon bond to the remaining time to maturity of a
What is the difference between performance measurement and performance evaluation?
Suppose that the active return for a portfolio over the past year was 130 basis points after management fees. What questions would you have to before concluding that the manager’s performance was
Not only do clients find performance attribution analysis helpful but so does the chief investment officer of an asset management firm in evaluating the firm’s bond portfolio team. Explain why.
A financial institution has hired three external portfolio managers: X, Y, and Z. All three managers have the same benchmark. A performance attribution analysis of the portfolios managed by the three
Suppose that the monthly return for two bond managers is as follows:What is the arithmetic average monthly rate of return for the two managers?
What is the time-weighted average monthly rate of return for the two managers in Question 2?
Why does the arithmetic average monthly rate of return diverge more from the time-weighted monthly rate of return for manager II than for manager I in Question 2?
Smith & Jones is a money management firm specializing in fixed-income securities. One of its clients gave the firm $100 million to manage. The market value for the portfolio for the four months
The Mercury Company is a fixed-income management firm that manages the funds of pension plan sponsors. For one of its clients it manages $200 million. The cash flow for this particular client’s
If the average quarterly return for a portfolio is 1.23%, what is the annualized return?
If the average quarterly return for a portfolio is 1.78%, what is the annualized return?
What are the difficulties of constructing a normal portfolio?
Explain the differences between a futures contract and a forward contract.
What are the delivery options granted to the seller of the Treasury bond futures contract?
How is the theoretical futures price of a Treasury bond futures contract affected by the delivery options granted to the short?
Explain how the shape of the yield curve influences the theoretical price of a Treasury bond futures contract.
Explain how the shape of the yield curve influences the theoretical price of a Treasury bond futures contract. Discuss.
Suppose that bond ABC is the underlying asset for a futures contract with settlement six months from now. You know the following about bond ABC and the futures contract: (1) In the cash market ABC is
Explain why the implied repo rate is important in determining the cheapest-to-deliver issue.
A manager wishes to hedge a bond with a par value of $20 million by selling Treasury bond futures. Suppose that (1) the conversion factor for the cheapest-to-deliver issue is 0.91, (2) the price
Suppose that without an adjustment for the relationship between the yield on a bond to be hedged and the yield on the hedging instrument the hedge ratio is 1.30.Answer the below questions.(a) Suppose
Suppose that a manager wants to reduce the duration of a portfolio. Explain how this can be done using Treasury bond futures contracts.
Answer the below questions.(a) What is counterparty risk?(b) Why do both the buyer and seller of a forward contract face counterparty risk?
What risks are associated with hedging?
How could a portfolio manager use a Treasury bond futures contract to hedge against increased interest rates over the next quarter?
Consider the portfolio in Exhibit 29-3. Suppose that the dollar duration of the 5-year Treasury note futures contract is $5,022.a. What position would a portfolio manager have to take in the contract
Consider the portfolio in Exhibit 29-3. Suppose that the dollar duration of the 5-year Treasury note futures contract is $5,022.a. What position would a portfolio manager have to take in the contract
Suppose that an institutional investor wants to hedge a portfolio of mortgage pass-through securities using Treasury bond futures contracts. What are the risks associated with such a hedge?
The following excerpt appeared in the following article, “Duration,” in the November 16, 1992, issue of Derivatives Week, p. 9:“TSA Capital Management in Los Angeles must determine duration of
One of the problems in liability-driven investing when using cash market Treasuries for hedging interest-rate risk is that the duration will producea dollar duration that does not match that of the
You work for a conservative investment management firm. You recently asked one of the senior partners for permission to open up a futures account so that you could trade interest-rate futures as well
What does it mean if the cost of carry is positive for a Treasury bond futures contract?
If the Eurodollar CD futures contract is quoted at 91.75, what is the annualized futures 3-month LIBOR?
Suppose that an investor purchased a Eurodollar futures contract at an index price of 95.00. At the settlement date, suppose that the settlement price is 95.40. Explain whether the buyer or the
Explain how a market participant concerned with a decline in 3-month LIBOR can hedge that risk using the Eurodollar futures contract.
Answer the below questions.(a) What is Euribor?(b) What is EURIBOR futures contract?
For a Treasury futures contract, how do you think the cost of carry will affect the decision of the short as to when in the delivery month the short will elect to deliver?
Explain the asymmetric effect on the variation margin and cash flow for the short and long in an interest-rate futures contract when interest rates change.
An investor owns a call option on bond × with a strike price of 100. The coupon rate on bond × is 9% and has 10 years to maturity. The call option expires today at a time when bond × is selling
Does it make sense for an investor who wants to speculate on interest-rate movements to purchase an over-the-counter option?
“I don’t understand how portfolio managers can calculate the duration of an interest-rate option. Don’t they mean the amount of time remaining to the expiration date?” Respond to this
Answer the below questions.(a) What factors affect the modified duration of an interest-rate option?(b) Deep-in-the-money option always provides a higher modified duration for an option than a
How is the implied volatility of an option determined?
What are the delta and gamma of an option?
Explain why the writer of an option would prefer an option with a high theta (all other factors equal).
In implementing a protective put buying strategy, explain the trade-off between the cost of the strategy and the strike price selected.
Here is an excerpt from an article titled “Dominguez Barry Looks at Covered Calls,” appearing in the July 20, 1992, issue of Derivatives Week, p. 7: SBC Dominguez Barry Funds Management in
Determine the price of a European call option on a 6.5% four-year Treasury bond with a strike price of 100.25 and two years to expiration assuming: (1) the arbitrage-free binomial interest-rate tree
Determine the price of a European put option on a 6.5% four-year Treasury bond with a strike price of 100.25 and two years to expiration assuming the same information as in Exhibit 30-10.

Showing 16500 - 16600 of 32365

First
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
Last

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Secure Payment

Download Our App

© 2024 SolutionInn. All Rights Reserved