Questions from Corporate Finance

Q: Suppose ABC Inc. can borrow at a fixed rate of 9

Suppose ABC Inc. can borrow at a fixed rate of 9.5 percent or a floating rate of L IBOR 1percent. DEF Inc. can borrow at a fixed rate of 12 percent or a floating rate of L IBOR 1.5percent. Supposing t...

Q: CanGold Mining Company borrowed €100 million in France at an annual

CanGold Mining Company borrowed €100 million in France at an annual interest rate of 3.5 percent. The principal plus interest is due in one year. CanGold used the funds to purchase machine parts in Ge...

Q: Why is the expected return on a portfolio a weighted average of

Why is the expected return on a portfolio a weighted average of the expected returns of the underlying securities?

Q: Angela, a new investor, has contacted you with a question

Angela, a new investor, has contacted you with a question about the swap market. Provide a response to her question: “A swap agreement allows two companies to swap payments. Presumably, both parties b...

Q: At the end of the current year, you observe the following

At the end of the current year, you observe the following data about Government of Canada pure discount bonds (zero coupon bonds): Bond issue: A Years to maturity: 1 YTM%: 5 B...

Q: Over a given day, there were 10,000 trades made

Over a given day, there were 10,000 trades made for corn futures (i.e., 10,000 buyers and 10,000 sellers). A total of 2,000 of these trades were by buyers entering into new positions and 9,000 of thes...

Q: Discuss three different strategies you can follow to invest in Canadian securities

Discuss three different strategies you can follow to invest in Canadian securities to obtain a return over a three-year period.

Q: If the yield curve is upward (downward/inverted) where

If the yield curve is upward (downward/inverted) where is the market expecting short-term interest rates to go?

Q: What is the relationship among spot rates, forward rates, and

What is the relationship among spot rates, forward rates, and the cost of carry?

Q: Define initial margin, maintenance margin, margin call, open interest

Define initial margin, maintenance margin, margin call, open interest, and notional amount.