If a Canadian company builds and operates a mine in Indonesia, in the foreign-exchange market

there will be a(n)

A) decrease in the debits on Canada's capital account.

B) fall in the supply of dollars in the foreign-exchange market.

C) increase in the demand for dollars in the foreign-exchange market.

D) increase in the supply of dollars in the foreign-exchange market.

E) fall in the demand for dollars in the foreign-exchange market.

Explain four methods of valuing a corporate bond that is convertible into ordinary shares of the company after some future date. 17] Discuss briefly how all four methods might be used to assess the issue price of a new convertible loan stock. 131 [Total 10] Discuss the limitations and disadvantages of assessing managers on their investment portfolio performance. 181 State the key characteristics of money market instruments. [1] Outline the reasons why a pension fund might find investment in money market instruments attractive. Explain why pension funds would not normally invest a large proportion of their assets in money market Instruments. 13) [Total 8] In a small European country, the performance and the asset allocation split by country of all the major funds are published on a quarterly basis about 6 weeks after the quarter end. One of the fund managers manages a relatively small portfolio of international equities. His portfolio mandate excludes domestic equities whereas his benchmark is the median return of managers running funds which do not have this constraint. In terms of style. the manager's competitors are very active. Discuss the difficulties facing the fund manager in seeking to manage the portfolio of international equities within the terms of his mandate and the benchmark set. (in) Suggest ways for overcoming these difficulties. 131 [Total 10] Discuss the characteristics and uses of two equity indices used in the United States and two equity indices used in Japan. [8] Discuss reasons for using a notional portfolio approach in valuing the assets of a pension fund in an actuarial valuation. [7]