The return on foreign bond is the sum of the yield

Assignment Help Financial Management

Reference no: EM13868391

True and False

1) The return on a foreign bond is the sum of the yield over the holding period plus any capital gain/loss, plus currency gain/loss.

2) A short hedge involves selling futures contracts to cover the risk on a position in the spot market.

Reference no: EM13868391

Questions Cloud

What is annualized return on this investment : Suppose you buy stock at a price of $81 per share. Three months later, you sell it for $87. You also received a dividend of $.80 per share. What is your annualized return on this investment?

Calculate your return on investment one year later : Suppose you purchase 1,100 shares of stock at $49 per share with an initial cash investment of $18,000. The call money rate is 5 percent and you are charged a 1.5 percent premium over this rate. Calculate your return on investment one year later if t..

Anagerial accounting-finance is use of cost benefit analysis : A key technique in managerial accounting/finance is the use of “Cost Benefit Analysis” to help management make better business decisions. Define this approach in your own words and discuss 1-2 applications of this concept in the Acquisition/Contracti..

Hedging with options removes performance potentials : Hedging with options removes both upside and downside performance potentials. Options are used to insure an existing portfolio. For example, buying a put on an asset (or portfolio) reduces the risk of loss in case of a drop in value of the asset.

The return on foreign bond is the sum of the yield : The return on a foreign bond is the sum of the yield over the holding period plus any capital gain/loss, plus currency gain/loss. A short hedge involves selling futures contracts to cover the risk on a position in the spot market.

Example of market value-weighted index : Dow Jones 30 Industrial Average is an example of Market value-weighted index. Financial statements of a large corporation prepared using US GAAP and IFRS may have some difference but the P/E ratio will be same under GAAP and IFRS.

Downward movement of the british stock market : You would like to protect your portfolio of British equity against a downward movement of the British stock market. Which derivative can be used to achieve this?

Investing in an emerging market bond is risky : From an US investor's perspective, investing in an emerging market bond is risky because of:

What is the total cash paid for this bond purchase : You purchase a Eurobond, at a quoted price of 102%. The annual coupon is 6%, and we are exactly one month after the past coupon date. You buy 100,000 EUR nominal value of the bond. What is the total cash paid for this bond purchase?

User Account

All Pages