Questions from Corporate Finance

Q: Explain when to use the arithmetic mean and when to use the

Explain when to use the arithmetic mean and when to use the geometric mean to describe a return series.

Q: FinCorp Inc. wants to examine a “real” efficient frontier

FinCorp Inc. wants to examine a “real” efficient frontier involving BlackBerry (BB.TO) and the Royal Bank (RY.TO). a. Using monthly data for these two companies from January 2011 to December 2011, gra...

Q: Describe the process of marking to market for futures contracts.

Describe the process of marking to market for futures contracts.

Q: Describe open interest with respect to futures contracts.

Describe open interest with respect to futures contracts.

Q: Explain why two counterparties would enter into an interest rate swap even

Explain why two counterparties would enter into an interest rate swap even when one has an absolute financing advantage in both the fixed and the floating rate markets.

Q: Describe how total return swaps work.

Describe how total return swaps work.

Q: If the trading volume of a futures contract has been increasing over

If the trading volume of a futures contract has been increasing over the past 5 days, does this mean that the open interest has also been increasing?

Q: CanComp, a Canadian computer manufacturer, will be delivering a large

CanComp, a Canadian computer manufacturer, will be delivering a large computer system to a German firm in six months. CanComp expects to receive payment of US$1.5 million at that time. Currently the s...

Q: Bert, the business reporter for the Sidney Driftwood, a small

Bert, the business reporter for the Sidney Driftwood, a small newspaper, has contacted you for information about the oil market. Provide responses to his questions below with arbitrage opportunities....

Q: Joyce and Anthony are in the process of renewing their mortgages.

Joyce and Anthony are in the process of renewing their mortgages. Each mortgage is an interest‐only mortgage (i.e., the borrower pays only interest and has a balloon payment at the end) for $100,000....