If a bank is asked to quote a rate on a one-year loan one year from today and the current interest rate on a one-year loan is 7 percent and a two-year loan is 8 percent, it should quote 9 percent.
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Q46: Briefly explain the term derivative.
Q47: For financial futures, Futures price = (spot
Q48: For commodity futures: Net convenience yield =
Q49: As a commodity futures contract nears expiration,
Q50: Futures contracts are usually marked to market.
Q52: Four investors enter into long sugar contracts.
Q53: Are companies that purchase or sell derivative
Q54: The convenience yield on a commodity futures
Q55: For commodity futures, (Futures price)× (1 +
Q56: Derivative instruments are financial contracts whose value
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