Directions: There are a total of 13 questions (10 in Part 1, 3 in Part 2) and 120 points to be earned on this exam. You have 6 hours. Part 1. True / False Questions (50pts/5pts each) Read each problem carefully and circle your final answer. No partial credit will be given for the problems in Part 1. 1. [ True / False ] If a trader thinks the price of a particular Treasury bond would decline in the near future, he can enter into a reverse repo to obtain the bond to sell. 2. [ True / False ] Firm A wants to raise $1 million through a fixed coupon rate while Firm B wants to raise $1 million through a floating rate coupon rate. For the borrowing rates for firm A and B given in the table below, there is a swap contract that would benefit both firms. Firm A Firm B Fixed Rate 15% 12% Floating Rate LIBOR+5% LIBOR+2% 3. [ True / False ] At any given time t, if Z(t, T1)