Interest

rate in the U.S. dollar is 4.5% and in the UK is 3.5% (both per annum with annual compounding). The dollar per GPB spot rate is $0.750/GBP. What is the arbitrage profit (to nearest thousand) on a required 1 million GBP payment if the forward rate is $0.800 per GBP and the exchange occurs

in one year? 

Which of the following describes a known dividend

yield on a stock?

The spot price of an investment asset is $30 and the risk-free rate

for all maturities is 10% with continuous compounding. The asset provides an

income of $2 at the end of the first year and at the end of the second year.

What is the three-year forward price?

The

price of an S&P 500 Index futures contract is 978.06 when you decided to

take a short position. When the position is closed the futures price is 950.30. If there are no settlement requirements, what is your dollar gain or

loss? Each S&P 500 contract is for $250 times the index value.

A trader enters into a long position in one

Eurodollar futures contract. How much does the trader gain or lose when the futures

price quote increases by 6 basis points?