An Insurance company owns $150 million of floating-rate bond…

An Insurance company owns $150 million of floating-rate bonds yielding LIBOR plus 1 percent. These loans are financed with $150 million of fixed rate guaranteed investment contracts (GICs) costing 10%. A Finance company has $150 million in auto loans with a fixed rate of 14%. These loans are financed with $150 million in CDs at a variable rate of LIBOR plus 4%. A. What is the risk exposure of the Insurance Company? B. What is the risk exposure of the Finance Company? C. What would be the cash flows of each company if they enter into a SWAP? D. Why are Interest Rates Swaps better to manage Interest Rate Risk than Duration Matching Strategy?  

1. What is a Price Weighted Index? Explain with an example….

1. What is a Price Weighted Index? Explain with an example. 2. What is a Value Weighted Index? Explain with an example. 3. Using an assumed example, show what is the effect of a  2 for 1 Stock Split on Price Weighted Stock Index? 4. Using an assumed example, show what is the effect of a 2 for 1 Stock Split on a Value Weighted stock index?  

¿Qué le duele? Students have funny ways of keeping themselve…

¿Qué le duele? Students have funny ways of keeping themselves awake when studying. Paco has a few tricks of his own. He was up late studying for the test and now he does not feel well. Read the description of his problem and answer each question with a complete sentence. For your reference: á é í ó ú ü ñ // Á É Í Ñ Ó Ú Ü // ¿ ? // ¡ !   Paco corre unas millas (miles). ¿Qué le duele? [word1] Paco come muchísima pizza. ¿Qué le duele? [word2]