Risk Management Solutions 4

Risk Management Solutions 4 - = $6,125 Effective Yield...

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Old Exam Questions - Risk Management - Solutions Page 4 of 4 Pages Value at Purchase (2.50%) $993,750 Plus Loss on Futures + 125 Effective Price $993,875 Effective Discount = $1,000,000 - $993,875
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Unformatted text preview: = $6,125 Effective Yield = ($6,125)(360/90) / ($1,000,000) = 2.45% Alternatively, Since the spread changed to -15 basis points, your effective yield will be: 2.30% - (-.15%) = 2.45%...
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This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.

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