All of the statements below are not false, except: 1. Changes in interest rates represent a risk for both borrowers and investors because of diminishing investment prospects and increased cost of borrowing; II. Failure to pay accounts receivable on time by customers may have a significant negative impact on the capital base of a company; III. Companies involved in cross-border trades are subject to FX risks: IV. It is essential for banks to assess the creditworthiness of customers to mitigate the credit risk; V. Liquidity is an important consideration only for a central bank as it takes care of the availability of funds within a financial system. Select one: a. Only v b. Only II and V c. Only d. All of the statements are true e. All of the statements are false The following statements are not associated with Futures, except: 1. Futures are standardised contracts meaning that the government establishes the format of futures contract to be traded between parties over-the- counter II. "Exchange-traded" is one of characteristics of a futures contract; III. In the futures market the investor should carry out a transaction opposite to one to be conducted in the physical market in a future date; IV. In future the transactions should be repeated in order to maintain the conditions of a zero-sum game; V. Clearing house marks-to-market futures contracts in order to anticipate future market valuations: VI. Maintenance Margin Calls are used to top up the initial margin to ensure the future ability of the party to futures contract to perform its obligations. Select one: a. Only II and VI b. Only 11 c. Only I and II d. Only VI e. Only II and V 1. Only II, V and VI g. Only III and IV O h . Only II, III and IV Windows When a company contacts a bank and asks for a 3-month forward rate and is quoted by the bank's FX dealer AUD/USDO.9560-65 14.20, then the three month forward rate is: Select one: a AUD/USD0.9536-45 b. AUD/USD0.9540-51 C. AUD/USD0.9574-85 d. AUD/USD0.9580-79 Calculate the market value of a bank bill futures contract with a face value of $1000000, a reported price of $93.25 and 140 days to maturity. Select one: a. 974762.99 b. 2442288.39 C. 373881.69 O d. 1926629.72 Hedging as a risk management technique is used by Hedge funds to provide certainty to future cash flows. Select one: True O False The company expects to borrow approximately $1 million in three months. The current rate of interest is 6.00% p.a. but is forecast to rise. To hedge the position, the company wishes to use 3 year Treasury bond futures contracts trading at 93.500. Calculate the profit or loss from the position in futures market if in 3 months the contracts are trading at 95.000. Select one: a. 40,972.1 Loss b. 40,972.1 Profit O C. 40,628.94 Loss d. 40,628.94 Profit If an FRA dealer quotes '6Mv9M 7.25 to 20', this means that the dealer is prepared to: Select one: o a. lend three-month money at 7.05% per annum. b. borrow three-month money at 7.05% per annum. c. lend three-month money at 7.25% per annum. d. borrow three-month money at 7.25% per annum. O