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NEW QUESTION: 1
A stock that pays no dividends is trading at $100 spot or $104 as a three month forward. The interest rate you can borrow at is 6% per annum. US treasury yields are 4% per annum. What should you do to profit in the situation?
A. It is not possible to profit from the situation
B. Buy the forward and also buy the stock
C. Sell the stock and buy the forward
D. Buy the stock and sell the forward
Answer: D
Explanation:
Explanation
Since the stock is selling for $100 spot, its 3 month forward price for you would be $100*(1 + 6%*3/12) =
$101.50. Since the forward is priced at $104, it is 'rich' compared to the spot and should be sold. A profitable trade would be to buy the spot and sell the forward.
Imagine you borrow $100 and buy the stock, and simultaneously sell the forward. At the end of 3 months, you will receive $104 in return from the forward, and be obliged to return the initial $100 borrowed together with interest of $1.50 for the three months. You would make a riskless profit of $2.50 per share in three months.
Thus Choice 'c' is the correct answer.
Note that the treasury yield is irrelevant, what matters is the rate at which you can finance the trade which is
6% per annum.

NEW QUESTION: 2
To change the visible tonal range of an HDR image, choose ________ from the status-bar menu.
A. Document Profile
B. 32-bit Exposure
C. Scratch Sizes
D. Efficiency
Answer: B

NEW QUESTION: 3
A customer is using DP SnapMirror replication between two clusters. The source cluster is using
Clustered Data ONTAP 8.2.3
Which two versions are acceptable for the destination cluster to be operating? (Choose two.)
A. 8.3.1
B. 8.2.3
C. 8.0.2
D. 8.1.4
Answer: A,B

NEW QUESTION: 4
Which of the following BEST describes the difference between differential and incremental backups?
A. Differential backups will restore everything if needed. Incremental backups will restore just the latest changes since the last incremental backup.
B. Differential backups save everything since the last full backup. Incremental backups save everything since the last backup.
C. Incremental backups will restore everything that has changed in the last day. Differential backups will restore everything since the last full backup.
D. Differential backups save everything since the last backup. Incremental backups save everything since the last differential backup.
Answer: B

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