Under the terms of an interest rate swap

Assignment Help Financial Management
Reference no: EM132017974

Under the terms of an interest rate swap, a financial institution has agreed to pay 10% per annum and to receive six-month LIBOR in return on a notional principal of $100 million with payments being exchanged every 6 months. The swap has a remaining life of 4 months. The average of the bid and offer fixed rates currently being swapped for 6-month LIBOR is 12% per annum for all maturities. The 6-month LIBOR rate two months ago was 11% per annum. All rates are compounded semiannually. What is the value of the swap?

Reference no: EM132017974

Questions Cloud

What are the requirements to take the credentialing exam : What are the requirements to take the credentialing exam? What is the current cost and schedule for the exam?
Discuss the benefits of having no long-term debt : Discuss the benefits of having no long-term debt? Are there any negatives?
Financed at caribbean target debt-to-equity ratio : Assuming that the project will be financed at Caribbean’s target debt-to-equity ratio, should the company invest in the project?
List the specific nutrition issues affecting individuals : NTR2050 : Choose from one of the following stages: pregnancy, infancy and childhood, adolescence, adulthood, and old age.
Under the terms of an interest rate swap : Under the terms of an interest rate swap, The 6-month LIBOR rate two months ago was 11% per annum. What is the value of the swap?
Write an essay on a topic in solar system astronomy : Write a short essay (1000-1500 words) on a topic in solar system astronomy.
How would this sale of stock in affect ibm corporation : oe soldthese shares to Sally Forth for $15,000. How would this sale of stock in 2014 affect IBM corporation?
Why is it difficult to develop accounting principles : Why is it difficult to develop accounting principles that are appropriate for governments within the same category
Is there an ethical issue in this situation that relates : Integrity is one of the core values at Saint Leo University (please read Saint Leo University core values).

Reviews

Write a Review

Financial Management Questions & Answers

  Evaluate the relaxation in credit standards

Futon Company has been reviewing its credit policies.- Evaluate the relaxation in credit standards that Futon is considering.

  What is their yield to call

Atlantis Fisheries issues zero coupon bonds on market at price of $429 per bond. what is their yield to call?

  New production line is to overhaul the existing line

The alternative to investing in the new production line is to overhaul the existing line, Should ACME replace or renovate the existing line?

  What is the amount of each monthly mortgage payment

Donaldson's purchased some property for $1.2 million, paid 25 percent down in cash, and financed the balance for 12 years at 7.2 percent, compounded monthly. What is the amount of each monthly mortgage payment?

  Compute the annual inflation rate

Compute the annual inflation rate ,f, for the entire 20 year period?

  What do i plan to do to bring about this change

Values. What values are most central and critical to how you approach work? What values do you want to be known for practicing (not just preaching)?

  What is the current yield on the bonds

The Firm, Inc. has 8.6% coupon bonds on the market with eight years to maturity. The bonds make semi-annual payments and currently sell for 107.4 percent of par. What is the current yield on the bonds?

  Nominal yield to maturity-what is the price of bond today

A bond with 30 years to maturity has a face value of $1,000. The bond pays an 5 percent semi annual coupon, and the bond has a 7 percent nominal yield to maturity. What is the price of the bond today? Must show work.

  Compute the cash flows for the project

The CEO of the company you are following has asked you to analyze the possibility of acquiring a smaller business operation from another company. Compute the cash flows for the project. Use the cost of capital for your firm (Stock Project 4) and a pa..

  Bond value and time—constant required returns

Pecos Manufacturing has just issued a 15?-year, 11?% coupon interest? rate, ?$1,000?-par bond that pays interest annually.

  What is discounted payback for this project

The required this project rate of return is 14% for projects at this company what is the discounted payback for this project?

  What is the average inventory held during the year

What is the average inventory held during the year?

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