Calculate the value of the contract

Assignment Help Finance Basics
Reference no: EM133112702

Catan Bank has entered in a long 180-day FRA on the 90-day Treasury rate with the agreed upon rate of 2.5 percent. The notional amount is $4.1 million. Calculate the value of the contract 90 days after the start of the FRA if the new forward rate for the same underlying is 2.56 and you know the following spot rates (as of day 90):

90-day: 2.35%

180-day: 2.44%

270-day: 2.83%

360-day: 2.51%

Provide your answer in dollars rounded to two decimals.

Reference no: EM133112702

Questions Cloud

Determine the number of units of belleview must sell : During FY 2021, Belleview Company plans to sell Widgets for $6.00 a unit. Determine the number of units of Belleview must sell
What is the stock dividend yield : Assume that a stock pays a quarterly dividend of $0.48/share, has a stock price of $52 and quarterly EPS of $2.54.
Calculate the option price : Calculate the option price using the following information:
Prepare the journal entry to record C admission : Prepare the journal entry to record C's admission to the partnership under each of the following assumptions: D pays B P15,000 for 50% of her interest
Calculate the value of the contract : Catan Bank has entered in a long 180-day FRA on the 90-day Treasury rate with the agreed upon rate of 2.5 percent. The notional amount is $4.1 million. Calculat
Credit cards as a primary method of payment : It can be easy to go into debt by using a credit card unwisely. However, as technology advances and we're able to pay with our phone or our watch, we're relying
Debt by using a credit card : It can be easy to go into debt by using a credit card unwisely. However, as technology advances and we're able to pay with our phone or our watch, we're relying
What is the actual interest rate for this loan : Your cousin is due a tax refund of $400 in six weeks. What is the actual interest rate for this loan
Consumer behavior-parental styles : Differentiate between the four parental styles and their respective attitudes towards advertising, consumption and yielding to children's buying requests.

Reviews

Write a Review

Finance Basics Questions & Answers

  New structure and the benefits

What is the overall plan? What does Purchasing have to do with the categories? If they do it, then what is the outcome? Would it encounter support or resistance? Create a case to clarify the new structure and the benefits that will be created from ..

  Hanebury corporations current sales were 12 million sales

hanebury corporations current sales were 12 million. sales were 6 million 5 years earlier.a. to the nearest percentage

  If the expected return on the market is 16 percent and the

silicon corp. recently issued 10-year 12 percent coupon bonds at par value. silicons beta is 0.6 the optimal capital

  What is the economic order quantity

ABC Company sells 4,915 chairs a year at an average price per chair of $165. The carrying cost per unit is $25.96.

  Costs of financial distress

Who bears the costs of financial distress, on average? Discuss how firms can reduce the cost of financial distress.

  What is the average accounts payable for app

APP always takes the discount, but takes the full 15 days to pay its bills. What is the average accounts payable for APP? Round your answer to the nearest dollar.

  What is the after-tax cost of capital

The firm is financed with $120,000,000 of common shares (market value), $45,000,000 of preferred stock, and $80,000,000 of debt. What is the after-tax cost of capital for Droz's, if it is subject to a 35 % marginal tax rate?

  Banks specialize in risk management these banks invested

banks specialize in risk management. these banks invested heavily in mortgage backed securities expected fairly high

  Estimate of the one year treasury rate one year from now

What is the market's estimate of the one year Treasury rate one year from now?

  Evaluate two proposed alternatives regarding insulin pump

Evaluate the two proposed alternatives regarding the insulin pump.- Based upon your evaluation identify which alternative should be selected and support your decision.

  Annual return on your investment

If you want 6% annual return on your investment, how much must the annuity pay you each year for you to select that option?

  How agency problems may lead to non value-maximizing

Explain how agency problems may lead to non value-maximizing motives for mergers. Discuss the various academic theories offered as the rationale for motives induced by the agency problem.

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!

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