Interest rates in India are 5.25% p.a. and in Brazil they are currently at 2.5% p.a. The BRL/INR spot rate is 13.37.

(a) Calculate the theoretical three-year forward rate of the BRL implied by Interest Rate Parity.

(b) Now assume the actual two-year forward rate is BRL/INR 15.20. What, if any, is the percentage return from engaging in Covered Interest Arbitrage? Assume a transaction cost of 0.3% in the spot and the forward market. (Calculate the result as a percentage of your initial borrowing, accurate to 4 decimal places, making sure to include any opportunity cost in your calculations)

Interest rates in India are 5.25% p.a. and in Brazil they are currently at 2.5% p.a. The BRL/INR spot rate is 13.37. (a) Calculate the theoretical three-year forward rate of the BRL implied by Interest Rate Parity. (b) Now assume the actual two-year forward rate is BRL/INR 15.20. What, if any, is the percentage return from engaging in Covered Interest Arbitrage? Assume a transaction cost of 0.3% in the spot and the forward market. (Calculate the result as a percentage of your initial borrowing, accurate to 4 decimal places, making sure to include any opportunity cost in your calculations)

What is the duration GAP of a bank whose assets and liabilities are as follows? Assets: Cash $48 million Short-term Investments (D=0.8) $149 million Short-term Loans (D=0.6) $201 million Long-term Investments (D=4.2) $254 million Long-term Loans (D=6.2) $398 million Liabilities: Demand Deposits $46 million Short-term Interest-bearing Deposits (D=0.3) $595 million CDs (D=2.5) $148 million Borrowed funds (D=0.1) $153 million Round to three decimals.

You are conducting a multinomial Goodness of Fit hypothesis test for the claim that the 4 categories occur with the following frequencies:

Ho: pA=0.4; pB=0.1; pC=0.3; pD=0.2

Complete the table. Report all answers accurate to three decimal places.

What is the chi-square test-statistic for this data?
χ2=

What is the P-Value?
P-Value =

For significance level alpha 0.005,

What would be the conclusion of this hypothesis test?

• Reject the Null Hypothesis
• Fail to reject the Null Hypothesis

Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow.

Required:

Use the step method to allocate the service costs, using the following:

a. The order of allocation starts with Maintenance.

b. The allocations are made in the reverse order (starting with Cafeteria).

1. We have two samples of people who took a literacy test, termed Literacy A and Literacy B which are from two different states. Researches are interested if there's a difference in literacy between the two states. First use folded F test to see if the varianceare equal or not, then T- test

Using the following information, which investment would be most preferred using Roy's safety first criterion, if R_L=7%.

Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA =0.03 + 0.7RM + eA RB = -0.02 + 1.2RM + eB σM = 0.2 R-squareA = 0.3; R-squareB = 0.25 Assume you create for portfolio Q with investment proportions of 0.50 in P, 0.30 in the market index, and 0.20 in T-bills, portfolio P is composed of 60% Stock A and 40% Stock B. 1.What is the standard deviation of the portfolio Q?2. What is the beta of the portfolio Q? Group of answer choices 0.2556 0.2766 0.4800 0.1831

What is the duration GAP of a bank whose assets and liabilities are as follows?

Assets:
Cash $52 million
Short-term Investments (D=0.4) $153 million
Short-term Loans (D=0.8) $201 million
Long-term Investments (D=3.8) $247 million
Long-term Loans (D=5.2) $400 million

Liabilities:
Demand Deposits $46 million
Short-term Interest-bearing Deposits (D=0.3) $592 million
CDs (D=2.8) $148 million
Borrowed funds (D=0.1) $151 million

Round to three decimals.

Before each class, I either drink a cup of coffee, a cup of tea, or a cup of water. The probability of coffee is 0.7, the probability of tea is 0.2, and the probability of water is 0.1. If I drink coffee, the probability that the lecture ends early is 0.3. If I drink tea, the probability that the lecture ends early is 0.2. If I drink water, the lecture never ends early.
1) What’s the probability that I drink tea and finish the lecture early?
2) What’s the probability that I finish the lecture early?
3) Given the lecture finishes early, what’s the probability I drank coffee?