A buyer would face the greatest risk of default with:
A farmer making physical delivery on a short soybean futures position.
B. An investment bank making cash settlement on a short euro futures position.
C. A multinational firm making cash settlement on a short U.S. dollar forward contract.
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In an effort to influence the economy, a central bank conducted open market activities by selling government bonds. This implies that the central bank is most likely attempting to:
A. Contract the economy by reducing bank reserves.
B. Expand the economy through a lower policy interest rate.
Contract the economy through a lower policy interest rate.
Robin Herring, CFA, is a government bond research analyst at an independent credit rating agency. A competitor credit rating agency just downgraded the bonds of a government Herring follows. Herring n
A. Fair Dealing
B. Communication with Clients
C. Diligence and Reasonable Basis
Which of these embedded options most likely benefits the investor?
A. The floor in a floating-rate security
B. An accelerated sinking fund provision
C. The call option in a fixed-rate security
Zhao Xuan, CFA, is a sell side investment analyst. While at a software industry conference, Zhao hears rumors that Green Run Software may have falsified its financial results. When she returns to her
A. Report her suspicions to Green Runs management.
B. Do nothing,until other analysts support her analysis.
C. Recommend her clients sell their Green Run shares immediately.