4520-exam1-practice

# 4520-exam1-practice - FIN4520 Practice Exam 1 Dr Lucy...

This preview shows pages 1–2. Sign up to view the full content.

Practice Exam 1 Dr. Lucy Ackert 100 possible points Formula sheet permitted (one-side of a sheet of paper, only formulas) Part 1: Multiple Choice (3 points each) Circle the correct answer. If more than one answer is circled, the answer is incorrect. 1. The cash prices of six-month and one-year Treasury bills are 99.5 and 99.0, respectively. Assume a face value of \$100. What is the six-month spot rate? a. 0.005 b. 0.01 c. 0.02 d. 0.025 e. 0.05 2. As in question 1, the cash prices of six-month and one-year Treasury bills are 99.5 and 99.0, respectively. What is the one-year spot rate? a. 0.005 b. 0.01 c. 0.02 d. 0.025 e. 0.05 3. A trader enters into a one-year long forward contract to buy an asset for \$60 when the spot price is \$57. The spot price in one year proves to be \$61. What is the trader’s gain or loss? a. \$3 gain b. \$1 loss c. \$1 gain d. \$4 gain e. \$3 loss 4. On the floor of a futures exchange one futures contract is traded where both the long and short parties are closing existing positions. What is the resultant change in open interest? a. up 1

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 5

4520-exam1-practice - FIN4520 Practice Exam 1 Dr Lucy...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online