Valuation of a swap during its life will least likely involve in the application of the principle of no arbitrage.
<h3>What is Swap?</h3>
Swap involves two individual that exchanging properties or money. This individual use different tools for the exchange as desired by them.
Arbitrage allows for sale of goods or property at the highest asking price and valuation will most like involve in it.
Therefore, valuation of a swap during its life will least likely involve in the application of the principle of no arbitrage
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$560 I just took the test on primavera and this was right.
The sale and purchase of government securities by the Fed would leave reserves unchanged.
<h3>
What is the effect of the purchase and sale of government securities?</h3>
The Fed is the Central Bank of the United States. One of the duties of the Fed is to conduct monetary policies. Monetary polices are used to affect the level of money supply in the economy.
One of the monetary policy tools of the Fed is open market operation. When the Fed sells government securities, it is known as an open market sales which reduce money supply. When the Fed buys government securities, it is known as an open market purchase which increases money supply.
Reserve ratio is the percentage of deposits that is required of commercial banks to keep as reserves. Reserve ratio is determined by the Fed.
Change in reserve = ( value of government securities bought / reserve ratio) - (value of government securities sold / reserve ratio)
($500 / 0.2) - (500 / 0.2) = 0
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The framers of the US constitution separate powers and provide for a system of checks and balances in order to guard against a tyrannical government where one particular branch would have too much power.
<h3>What are the functions of the 3 branches of government.</h3>
Apart from the delegate duties that these three branches have in the government, the way that the framers created them was to ensure that they were able to check each other. They provided checks and balance for each other.
The executive had the power to call the other two to other and so also doe the judiciary and the legislative arm of the government so that the people would not experience a dictatorship.
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