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Assume the following information:   Spot rate today of Swiss franc = $.60 1-year forward rate as of today for Swiss franc = $.63 Expected spot rate 1 year from now = $.64 Rate on 1-year deposits denominated in Swiss francs = 7% Rate on 1-year deposits denominated in U.S. dollars = 9%   From the perspective of U.S. investors with $1,000,000, covered interest arbitrage would yield a rate of return of ____%.

If your firm expects the euro to substantially appreciate, it could speculate by ____ euro call options or ____ euros forward in the forward exchange market.

Briefly explain how banks with a disproportionate amount of long-term loans on the asset side of their balance sheet while funding those loans with a disproportionately large amount of short-term liabilities would be impacted by a sudden and sharp increase in interest rates.  In addition, briefly note how a bank facing this situation could improve its balance sheet to mitigate its sensitivity to changes in interest rates?

The government safety net creates ________ problem because risk-loving entrepreneurs might find banking an attractive industry.

The three factors that explain the risk structure of interest rates are ______________________.

An increase in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the required yield of Treasury bonds, everything else held constant.

If you have a position where you might be obligated to buy pounds, you are:

There is ________ for any zero-coupon bond whose time to maturity matches the holding period.

What group emerged from this period with the most control over the governance of England (and, later, Great Britain)?

Which of the following is true regarding the euro?