Define and explain a constant maturity swap

Assignment Help Risk Management

Reference no: EM13925923

1. An interest rate swap has two primary risks associated with it. Identify and explain each risk.

2. Define and explain a constant maturity swap.

3. Consider a $30 million notional principal interest rate swap with a fixed rate of 7 percent, paid quarterly on the basis of 90 days in the quarter and 360 days in the year. The first floating payment is set at 7.2 percent. Calculate the first net payment and identify which party, the party paying fixed or the party paying floating, pays.

Reference no: EM13925923

Questions Cloud

Criminal law evaluation paper : Prepare a 700- to 1,050-word paper in which you address all of the following items: Examine the sources and purposes of criminal law. Identify and explain jurisdiction to create and enforce criminal law.

Problem regarding the sarbanes-oxley act : Write a 350- to 700-word review of the article. Your review should discuss how the SOX Act may affect ethical decision making in today's business environment, and the criminal penalties for which the act provides.

Fears of speaking in public : Reflect on personal fears of speaking in public and ways to mange nervousness

Probability of getting heads : 1. You flip a coin three times. (a) What is the probability of getting heads on only one of your flips? (b) What is the probability of getting heads on at least one flip?

Define and explain a constant maturity swap : An interest rate swap has two primary risks associated with it. Identify and explain each risk. Define and explain a constant maturity swap.

Matrix management violates the management principle : The tendency for the project deliverables to expand over time-usually by changing requirements, specifications, and priorities-

For a two sample confidence interval : The Chi-square test results having expected values of less than 5 in a cell may produce a greater likelihood of having type I errors (wrongly rejecting the null hypothesis).

Percentage of the variation in some other variable : A single variable X can explain a large percentage of the variation in some other variable Y when the two variables are:

What is the california bearing ratio for granular : What is the California bearing ratio for granular A, Granular B, 19 mmm Crusher Run Limestone, 50 mm Crusher run limestone, HL3 and HL8 Asphalt?

User Account

All Pages