The floating rate and receiving the fixed rate

Assignment Help Financial Management
Reference no: EM132058660

The current term structure of LIBOR interest rates is as follows:

L0(180)=0.0585

L0(360)=0.0605

L0(540)=0.0624

L0(720)=0.0665

You want to price the fixed side of an interest rate swap with semiannual payments on a notional of $25 million.

A. What is the annualized fixed rate?

120 days later, the term structure is as follows:

L120(180)=0.0613

L120(360)=0.0629

L120(540)=0.0653

L120(720)=0.0697

B. What is the value of the swap from the point of view of the party paying the floating rate and receiving the fixed rate?

(NO EXCEL WORK. PLEASE SHOW YOUR WORK IN DETAIL)

Reference no: EM132058660

Questions Cloud

Guaranteed account to fully fund this request : How much money should be deposited into this guaranteed account to fully fund this request?
What is economic order quantity : Fixed costs per order are $178 and carrying cost is $30 per unit per year. What is the Economic Order Quantity?
What are portfolio weights and expected return of portfolio : This portfolio will also have a greater expected return. What are the portfolio weights and expected return of this portfolio?
Cross rate between the japanese yen and the canadian dollar : You can exchange $1 for either C$1.0551 or ¥120.12. What is the cross rate between the Japanese yen and the Canadian dollar? That is, solve for ¥ per C$.
The floating rate and receiving the fixed rate : What is the value of the swap from the point of view of the party paying the floating rate and receiving the fixed rate?
What is the firm net float : Deposited funds are available in 2 days. What is the firm's net float?
What is the appropriate price : If you purchase a straddle with a strike price of $110 and price it using a 2-period binomial model, what is the appropriate price?
Calculate the price of put option expiring in two periods : Calculate the price of a put option expiring in two periods with an exercise price of $60.
About reducing the cost of preassembly pretest : How would you go about reducing the cost of preassembly pretest?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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