User Account

All Pages

Determine how much the fra is worth

Assignment Help Accounting Basics
Reference no: EM133173395

Question - A bank sells a three against six $3,000,000 FRA for a three-month period beginning three months from today and ending six months from today. The purpose of the FRA is to cover the interest rate risk caused by the maturity mismatch from having made a three-month Eurodollar loan and having accepted a six-month Eurodollar deposit. The agreement rate with the buyer is 5.50 percent. There are actually 92 days in the three-month FRA period. Assume that three months from today the settlement rate is 4.875 percent. Determine how much the FRA is worth and who pays who-the buyer pays the seller or the seller pays the buyer.

Reference no: EM133173395

Questions Cloud

Compute the break-even sales units and sales dollars : Ivanhoe, Inc. has a unit selling price of $800, variable cost per unit of $450, and total fixed costs of $275,100. Compute the break-even sales units
Determine the maximum deduction for child care costs : The child care costs for the current year, all properly documented for tax purposes, are $1700. Determine the maximum deduction for child care costs
What is the optimal number of orders per year : Dostyk Inc. is one of the largest retail chains with more than 100 branches in the United States. What is the optimal number of orders per year
Evaluate different strategy formulation processes : Stakeholder Meeting Simulation and White Paper Preliminary Outline - Develop and plan the implementation of a selected strategy for different organisational
Determine how much the fra is worth : Assume that three months from today the settlement rate is 4.875 percent. Determine how much the FRA is worth and who pays who-the buyer pays
What are the red flags in this case : The parties in the contract were the trust of Company B and Mr. Y of Company C. What are the red flags in this case
Prepare a journal entry to separate the preceding items : Deposit to guarantee contract performance $5000. Prepare a journal entry to separate the preceding items into their proper accounts
Why do business managers prefer stable earnings trends : The manipulation of earnings, known as earnings management, commonly involves income smoothing. Why do business managers prefer stable earnings trends
What is the dollar amount of sales of spi : If SPI Inc. has a market share of 30% and the average sales price is $2 per Loppin, what is the dollar amount of sales of SPI

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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