Find the net payment on an equity swap

Assignment Help Financial Management

Reference no: EM13880567

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.

1. party B pays $851,500

2. parry B pays $48,500

3. party B pays $251,500

4. party A pays $251,500

5. party A pays $851,500

Reference no: EM13880567

Questions Cloud

What is the equipments after-tax salvage value : Kennedy Air Services is now in the final year of a project. The equipment originally cost $24 million, of which 75% has been depreciated. Kennedy can sell the used equipment today for $6 million, and its tax rate is 35%. What is the equipment's after..

Find payoff of interest rate call option on annual rate : Find the payoff of an interest rate call option on the annual rate with an exercise rate of 10 percent if the one-period rate at expiration is 11 percent.

Required to determine swaption payoff at expiration : Which of the following is not required to determine a swaption payoff at expiration?

Value of interest rate call option at maturity of loan : Determine the value of an interest rate call option at the maturity of a loan if the call has a strike of 12 percent, a face value of $50 million, the loan matures 90 days after the call is exercised, the call expires in 60 days, the call premium is ..

Find the net payment on an equity swap : 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. ..

Confidence index increases or decrease : Suppose Baa-rated bonds currently yield 7.8%, while Aa-rated bonds yield 5.8%. Now suppose that due to an increase in the expected inflation rate, the yields on both bonds increase by 1.2%. What would happen to the confidence index? (Round your answe..

Calculate the confidence index this year and last year : This Year Last Year Yield on top-rated corporate bonds 9.4% (this year) 9.9% (last year) Yield on intermediate-grade corporate bonds 11.9 (this year) 11.4 (last year) Calculate the confidence index this year and last year.

Interest compounded annually : Beatrice invests $1,460 in an account that pays 5 percent simple interest. How much more could she have earned over a 6-year period if the interest had compounded annually?

Find the rate on pure discount loan hedged with long FRA : Find the rate on a pure discount loan hedged with a long FRA if the loan is for $10 million and matures in 30 days, the FRA is 30-day LIBOR, the fixed rate on the FRA is 4 percent, and LIBOR at the time the loan is taken out is 5 percent.

User Account

All Pages