Home/fi

SSEI Q Forum Latest Questions

amanchawla469@gmail.com
  • 0
Beginner
Asked: In:
  • 0

I tried to think it in terms of l0ng put option but i dont think that can be interpreted as a long put option because of different exposure, can you please clear this doubt.

fi
amanchawla469@gmail.com
  • 0
Beginner
Asked: In:
  • 0

This statement is stated in the core, I think it is incorrect because the one who is getting more claim on a leg should receive the upfront premium not pay it.

fi
amanchawla469@gmail.com
  • 0
Beginner
Asked: In:

Morrison is considering purchasing protection on Kand Corporation debt to hedge the portfolio’s position in Kand. She instructs Watt to determine if an upfront payment would be required and, if so, the amount of the premium. Watt presents the information for the CDS in Exhibit 1.Credit spread 700 bps Duration 7 years Coupon rate 5%Morrison purchases 10-year protection on Kand Corporation debt. Two months later the credit spread for Kand Corporation has increased by 200 bps. Morrison asks Watt to close out the firm’s CDS position on Kand Corporation by entering into a new, offsetting contract.If Deem Advisors enters into a new offsetting contract two months after purchasing protection on Kand Corporation, this action will most likely result in: A. a loss on the CDS position. B. a profit on the CDS position. C. neither a loss nor a profit on the CDS position.

  • 0

My doubt is that when calculating profit, we should also consider the upfront premium of 14% and coupon of 5% paid for 2 months while calculation the profit or loss, am i correct if no please answer why.

fi
amanchawla469@gmail.com
  • 0
Beginner
Asked: In:

this is the question write up : Country A: “The government yield curve has changed little in terms of its level and shape during the last few years, and I expect this trend to continue. We assume that future spot rates reflect the current forward curve for all maturities.” Country B: “Because of recent economic trends, I expect a reversal in the slope of the current yield curve. We assume that future spot rates will be higher than current forward rates for all maturities.”Country C: “To improve liquidity,Country C’s central bank is expected to intervene, leading to a reversal in the slope of the existing yield curve. We assume that future spot rates will be lower than today’s forward rates for all maturities.” This is the question : 33. Based on Exhibit 1 and Tyo’s expectations, which country’s term structure is currently best for traders seeking to ride the yield curve? A. Country A B. Country B C. Country C

  • 0

A is correct. Country A’s yield curve is upward sloping—a condition for the strategy—and more so than Country B’s. This is the ans which is country A but don’t you think that the statement “We assume that future spot rates reflect ...

fi