User Account

All Pages

Annualized cost of borrowing for libor

Assignment Help Finance Basics
Reference no: EM132584872

You are the treasurer of a firm that will need to borrow $20 million at LIBOR plus 1.5 points in 30 days. The loan will have a maturity of 180 days, at which time all the interest and principal will be repaid. The interest will be determined by LIBOR on the day the loan is taken out. To hedge the uncertainty of this future rate, you purchase a call on LIBOR with a strike of 9 percent for a premium of $25,000. Determine the amount you will pay back and the annualized cost of borrowing for LIBORs of 7 percent and 11 percent. Assume the payoff is based on 180 days and a 360-day year. The current LIBOR is 9 percent.

Reference no: EM132584872

Questions Cloud

Find out the annualized loan rate for libor : Assume the payoff is based on 90 days and a 360-day year. The current LIBOR is 9 percent.
How evolution of health care policy has influenced programs : Post an explanation of how the evolution of health care policy has influenced programs such as Medicaid and Medicare. Then, describe a specific Medicaid policy.
Calculate total profit that mr mapimpi would make upon sale : Calculate the total profit/loss that Mr Mapimpi would make upon sale of the bonds if he purchased them today but then urgently needed to sell them
Argumentative research paper : Argumentative essay and add academic research. The research needs to be academic and from peer-reviewed sources.
Annualized cost of borrowing for libor : You are the treasurer of a firm that will need to borrow $20 million at LIBOR plus 1.5 points in 30 days. The loan will have a maturity
Discuss the two disadvantages of sub-contracting audit : Discuss the TWO disadvantages of sub-contracting audit engagements in the public sector to private accounting firms with explanations.
Define main developments and contributions to behaviorism : Write a 700- to 1,050-word paper on the main developments and contributions to behaviorism. Include Pavlov's and Watson's significant contributions.
Value your business would offer to the customers : Propose a business that you could create and describe the value your business would offer to the customers.
Find the deferred tax amount in the first year is equal to : For computing tax, it provides 15% depreciation under Written-down-value (WDV) method. If tax rate is 30%, the deferred tax amount in the first year is equal to

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd