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Please HELP!!! 4 Marks A long bond investor who puts the bond out on repo is doing which of the following? A. Paying the repo
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4 Marks A long bond investor who puts the bond "out on repo" is doing which of the following? A. Paying the repo rate on borrowed cash B. Earning the coupon accruing on the bond C. Profiting if the bond's market YTM goes higher D. Doing both of A and B E. Doing all of A,B, and C 5 Marks You are a bond fund investment manager and are considering to include a specific bond in your portfolio. Having correctly determined a set of zero-coupon rates by which to value this bond, you calculate the present value of all of its projected cash flows. And the sum of these PVs is greater than the bond's market price. Which of the following is a logical next action? A. Reject the bond as an investment, because it is too expensive B. Accept the bond as an investment, because it exceeds your profitability requirements C. Reject the bond as an investment, because its PV is greater than its Market Price D. Accept the bond as an investment, because its market price implies a lower YTM than you require 4 Marks Which of the following would make a the seller of a credit default swap (CDS) pay out to the buyer? A. A debt restructuring unilaterally imposed by the reference credit on its bond-holders B. A bankruptcy by the protection seller C. If the credit protection buyer misses making a CDS "spread" payment D. A and C are correct
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