How a firm can use swaptions to achieve the desired result

Reference no: EM13925778

A firm has previously issued fixed rate non- callable debt. Because interest rates are perceived to be temporarily high, the firm would like to have the flexibility of calling the debt later when rates are expected to fall and replacing it with floating-rate debt. Explain how a firm can use swaptions to achieve this desired result. Also, identify and compare an alternative method that can be used to convert fixed-rate debt to floating- rate debt.

Reference no: EM13925778

Questions Cloud

Compare management theories and styles. : What tools and techniques would you use to aid your decision making?

Transportation security administration implementation : The Transportation Security Administration (TSA) implementation was one of the first actions the United States took to protect its homeland against the terrorist attacks.

Examine the classifications of security controls : Examine the classifications of security controls (physical, administrative, and technical) and the types of security controls (preventive, detective, and corrective). Explain how these different types of controls are used to enforce security polic..

Calculate the price, earnings ratio, price and cash flow : Calculate the 2013 inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover.

How a firm can use swaptions to achieve the desired result : Explain how a firm can use swaptions to achieve this desired result. Also, identify and compare an alternative method that can be used to convert fixed-rate debt to floating- rate debt.

Opportunities and new challenges for the elderly : "The population of the United States is aging, and with this change in the composition of the population will come new opportunities and new challenges for the elderly" (Stone, 2000).

Java program which defines an unconstrained array : Write a Java program which defines an unconstrained array of user defined length n, that contains n Random numbers and outputs those random numbers that are even numbers

Leadership style which best describes the person : From the first e-Activity, determine which leadership style best describes the person you researched and how you could incorporate elements of that style into your current (or future) role at work. Provide specific examples to support your respons..

What happens to the continuously compounded forward rate : Verify this result and explain what happens to the continuously compounded forward rate as the number of days in the forward contract increases and the more distant spot rate remains at 6 percent.

User Account

All Pages