Find the annualized rate of return on the loan

Assignment Help Finance Basics
Reference no: EM133061863

A major international bank makes a $7.5 million 270-day pure discount loan at LIBOR of 7.9%. At the same time, however, it exercises an interest rate put that has a strike of 9.75%. Find the annualized rate of return on the loan. Ignore the cost of the put.

Reference no: EM133061863

Questions Cloud

How much is the contract worth now : Suppose you were a writer and you just signed a contract with a publisher in which you will receive the following payments for the next five years: $10,000, $20
Small business-consulting firm : You worked as a partner for a small business-consulting firm and you want to leave the company because of a better career option. Based on the partnership agree
Compare uk design council double diamond and stanford model : The UK Design Council Double Diamond is a 4 phase model for design thinking innovation while the Stanford d.school model has 5 phases
What is the firm dividend growth rate : Assuming VVI's stock is currently selling for $51, the expected dividend one year from now is $1.50. What is the firm's dividend growth rate
Find the annualized rate of return on the loan : A major international bank makes a $7.5 million 270-day pure discount loan at LIBOR of 7.9%. At the same time, however, it exercises an interest rate put that h
Evaluate performance of an equity fund : Discuss how you would use CAPM to evaluate performance of an equity fund given information on its "alpha" and "beta". Draw a graph to illustrate your answer.
What amount should be used as the initial cash flow : The building cost is estimated at $1,524,000. What amount should be used as the initial cash flow for this project
What is the expected return of a portfolio : Suppose Autodesk stock has a beta of 2.30?, whereas Costco stock has a beta of 0.68. If the? risk-free interest rate is 6.5% and the expected return of the mark
Which concept stands out to you as the most useful insight : Which concept stands out to you as the most useful insight that you have gained from this material that will influence your thinking as you progress towards you

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the average cash flow you will receive

What is the average cash flow you will receive from the mine if it is always kept in operation and the silver always is sold in the year it is mined?

  What growth rate is expected for the companys stock price

The stock price of Russell, Inc. is $81. Investors require a 14 percent rate of return on similar stocks. If the company plans to pay a dividend of $4.20 next year, what growth rate is expected for the company's stock price?

  Find value of the stock and expected price

A company paid a dividend of 1.80 per share but the dividend is expected to increase to 4 percent per year. The risk free rate is 6% and the market risk premium is 5 percent.

  The purpose of the annotated bibliography is to assist you

the purpose of the annotated bibliography is to assist you in developing research analysis skills including critical

  Present value of settlement assuming the interest

Jonny just received a settlement in a lawsuit that promises $350 in 5 years. The lawsuit will also pay him a second amount of $550 that will be received in 10 years. Jonny wants instead to spend the settlement money today. What is the present valu..

  Once youve found a full annual report complete each part of

research bank of america and access the companys web page on the internet to read their most recent annual report. the

  Retirement plan for walmart employees

What is the retirement plan for Walmart's employees?

  How much will each twin have

Beginning at age 27, Kimberly invests $2000 per year for ten years and then never sets aside another penny. Kaitlyn waits ten years and then invests $2000.

  Strayer databases to research budget planning and control

Strayer databases to research budget planning and control

  Explain why consumer products often require more adaptation

Explain why consumer products often require more adaptation than industrial products sold in business-to-business markets.

  What price change would lead to a margin call

A company enters into a short futures contract to sell 5,000 bushels of wheat for 250 cents per bushel. The initial margin as stipulated by the exchange.

  What the firm''s cash conversion cycle

Assume that a firm has a payables deferral period of 40 days, an inventory conversion period of 62 days, and an average collection period of 29 days. What's the firm's cash conversion cycle?

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