a) The Westpac bank announced today that it has raised USD500 million through the issue of Debt Instruments into the international capital markets. Why might the bank borrow such a large amount of foreign currency liabilities? b) Antique manufacturer in Malaysia is exporting goods to Australia. To ascertain the firm's exposure to foreign exchange risk, the company needs to calculate the MYR/AUD cross-rate. An FX dealer quotes the following rates: USD/AUD 1.3315-67 USD/MYR 4.1539 - 601 You are required to calculate the MYR/AUD cross-rate and explain what the quote indicates from the dealer's perspective, and which quote would apply to the Antique Manufacturer? 1. Price of a bond, debenture and note at a coupon date P= 1-(1+i) A(1+i 2. Price of a bond, debenture and note between coupon dates (above formula adjusted by (1+1)* 1-(1+i)" + A(1+i)" (1+i) 3. Calculation of payment when present value (A) known e.g. instalment on mortgage loan A R 1-(1+i)" i 4. Pricing a Share with a Constant Dividend Do Po = rs 5. Pricing a Share with a Constant Dividend Growth Rate Do(1 + g) P = rs - g 6. Discount Securities - calculation of price and yield 6.1. Price = 365 x face value 365 + (yield/100 x days to maturity) 6.2. Yield = (sell price - buy price) x (days in a year x 100) buy price x days to maturity 7. Value of a Right V=N (cum rights price-subscription price) N+1