MC – Cat Bonds (catastrophe bonds)
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
When insurance companies issue Cat bonds, who do they share their risks with?
When insurance companies issue Cat bonds, who do they share their risks with?
What does the seller of a forward contract agree to do?
Determine the value of a futures contract on the Standard and Poor’s Index given the current level of the index, the dividend yield, and the risk-free rate.
Your numbers will vary.
Given three prices for oil, compute the payoffs of futures and the payoffs of using options if the firm decides to protect itself.
Your numbers will vary.
Given the interest rate, the spot price, and the coupon rate, determine the contract value of a futures contract written on a Treasury bond.
Your numbers will vary.
Given three futures prices for various contract lengths, determine the interest rate for each assuming that there is no convenience yield.
Your numbers will vary.
What advantages do insurance companies possess in assuming risk?
What determines the value of a derivative?
What term is used to refer to a forward interest rate contract?
What term is used to denote the price for immediate delivery of a commodity?