You have to price the first US-dollar Global bond for Robotron, a successful producer of automated AI machines. Standard & Poor's rated Robotron, BBB+. This will be a 10-year bond benchmark with deal size amounting to US$5 billion. Being a first-time issuer, Robotron, will pay a new issue concession of 25bps. The syndicate desk knows that the YTM on the US Treasury 10 year is 1.00%; and the spreads on investment grade A- and BBB corporate bonds trade at 75 bps 175bps over Treasuries. Based on this information, at what YTM should the investment bank price the Robotron deal?

a. 1.75%

b. 2.25%

c. 2.50%

d. 3.00%

Please mark which item is not part of the standard practices used by hedge fund:

a. Develop a top down and a bottoms-up approach to identify mispriced asset classes and securities where the portfolio manager can generate alpha for the fund

b. Keep track of performance and risk by estimating alpha and beta, Sharpe ratio, information ratio, Treynor measure and M2 of the funds portfolios

c. Run factor models to study systematic risk to factor loads and hedging potential

d. Observe frequent rebalancing of the funds as, over time, allocations drift away from market indices and benchmarks