Find the net payment on an equity swap

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Reference no: EM131615782

1. Find the net payment on an equity swap in which party A pays the return on a stock index and party B pays a fixed rate of 6 percent. The notional amount is $10 million. The stock index starts off at 1,000 and is at 1,055.15 at the end of the period. The interest payment is calculated based on 180 days in the period and 360 days in the year.

a. party B pays $851,500

b. parry B pays $48,500

c. party B pays $251,500

d. party A pays $251,500

e. party A pays $851,500

2. Find the upcoming interest payments in a currency swap in which party A pays U. S. dollars at a fixed rate of 5 percent on notional amount of $50 million and party B pays Swiss francs at a fixed rate of 4 percent on notional amount of SF35 million. Payments are annual under the assumption of 360 days in a year, and there is no netting.

a. party A pays $2,500,000, and party B pays SF1,400,000

b. party A pays SF1,400,000, and party B pays $2,500,000

c. party A pays SF1,750,000, and party B pays SF1,400,000

d. party A pays $2,500,000, and party B pays $2,000,000

e. party A pays $50 million, and party B pays SF35 million

3. For a currency swap with $10 million notional amount, the notional amount in British pounds if the exchange rate is

$1.55 is (approximately)?

a. £11.55 million

b. £15.5 million

c. £10 million

d. £6.45 million

e. none of the above

Reference no: EM131615782

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