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Financial Management: Advanced Topics in Bonds, Leases, and Currency Markets

A financial management project focused on advanced topics in bonds, leases, and currency markets.

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Financial Management: Advanced Topics in Bonds, Leases, andCurrency MarketsQuestion 11.Moniker Manufacturing's bonds were recently issued at their $1,000 par value. At anytime prior to maturity (20 years from now), a bondholder can exchange abond for a shareof common stock at a conversion price of $40. What is the conversion ratio?Answer22.5623.7525.0026.2527.563.3333pointsAnswer:23.75Question 2Suppose in the spot market 1 U.S. dollar equals 1.75 Canadian dollars. 6-month Canadiansecurities have an annualized return of 6% (and thus a 6-month periodic return of 3%). 6-month U.S. securities have an annualized return of 6.5% and a periodic return of 3.25%.If interest rate parity holds, what is the U.S. dollar-Canadian dollar exchange rate in the180-day forward market? In other words, how many Canadian dollars are required topurchase one U.S. dollar in the 180-day forward market?Answer1.27271.41411.57121.74581.92033.3333pointsAnswer:1.7458Question 3Curry Corporation is setting the terms on a new issue of bonds with warrants. The bondswill have a 30-year maturity and annual interest payments. Each bond will come with 20

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