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NEW QUESTION: 1
A currency with a lower interest rate will trade:
A. at the same prices for forwards as for the spots
B. cannot be determined solely on the basis of interest rates
C. at a forward premium
D. at a forward discount
Answer: C
Explanation:
Explanation
Given covered interest parity, the currency with a lower interest rate will trade at a forward premium. Choice
'b' is the correct answer.
For an intuitive reasoning, consider a currency forward contract that matures in 3 months. The seller has agreed to sell, say JPY 1,000,000 in exchange for USD 10,000 in the future. In order to cover himself, he borrows the USD right now and converts it to JPY at spot which he puts in a JPY deposit. Assuming JPY interest rates are less than USD interest rates, he pays more on his USD borrowing than he receives on his JPY deposit. Therefore he has to price the forward contract at a premium to spot to cover the interest rate differential.
NEW QUESTION: 2
A. Option C
B. Option B
C. Option A
D. Option D
Answer: C
NEW QUESTION: 3
Which two site-to-site tunnel-based VPN technologies support routing, multicast and private IP addressing? (Choose two.)
A. GRE
B. DMVPN
C. IPsec VPN
D. MPLS VPN
E. GET VPN
Answer: A,B
NEW QUESTION: 4
Refer to the exhibit.
You have a suboptimal outbound routing issue in the datacenter. Which two options you can use to resolve the issue? (Choose two)
A. On the OTV edge devices, configure an IP ACL that prevents hosts from reaching the FHRP master router on the other site
B. Remove the VLAN from which FHRP hellos are sent from the extended VLAN range
C. On the OTV VDC, configure an OTV MAC route filter that prevents the virtual FHRP MAC address from being announced to other sites.
D. Configure the same FHRP priority on all the OTV edge devices in both sites
E. On the OTV edge devices, configure a VACL that prevents FHRP hellos from being forwarded on the overlay
Answer: C,E