Interest rate swap
|Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
||المملكة العربية السعودية
الجامعة السعودية الإلكترونية
College of Administrative and Financial Sciences
Due Date: 05/05/2022@ 23:59
|Course Name: Financial Derivatives
|Course Code: FIN-405
||Student’s ID Number:
For Instructor’s Use only
Marks Obtained/Out of 10
|Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
· The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
· Assignments submitted through email will not be accepted.
· Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
· Students must mention question number clearly in their answer.
· Late submission will NOT be accepted.
· Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
· All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism).
· Submissions without this cover page will NOT be accepted.
Submission Date by students: 05 May 2022-11:59 PM(Thursday)
Place of Submission: Students Grade Centre via blackboard.
Marks: 10 Marks
Q1. Explain the classification of Future traders by trading style? ( Marks-3)
Q2. Suppose there is a commodity in which the expected future spot price is $60.To induce investors to buy futures contracts, a risk premium of $4 is required. To store the commodity for the life of the futures contract would cost $5.50.
Find the future s price? (Marks-3)
Q3. Explain the difference between a short hedge and a long hedge. ( Marks-2)
Q4. Briefly explain Interest rate swap and currency swap . (Marks-2)
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