A commercial bank recognizes

A commercial bank recognizes

A commercial bank recognizes that its net income suffers whenever interest rates increase.  Which of the following strategies would protect the bank against rising interest rates?

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Answer

[removed]Buying inverse floaters.
[removed]Entering into an interest rate swap where the bank receives a fixed payment stream, and in return agrees to make payments that float with market interest rates.
[removed]Purchase principal only (PO) strips that decline in value whenever interest rates rise.
[removed]Enter into a short hedge where the bank agrees to sell interest rate futures.
[removed]Sell some of the bank’s floating-rate loans and use the proceeds to make fixed-rate loans.

 

 

Suppose hockey skates sell in Canada for 165 Canadian dollars, and 1 Canadian dollar equals 0.71 U.S. dollars.  If purchasing power parity (PPP) holds, what is the price of hockey skates in the United States?

Answer

[removed]$94.89
[removed]$99.58
[removed]$113.64
[removed]$131.21
[removed]$117.15

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