User Account

All Pages

What is the expected interest income from the loan each year

Assignment Help Finance Basics
Reference no: EM131129425

A banker commits to a two-year $5,000,000 commercial loan and expects to fulfill the agreement in 30 days. The interest rate will be determined at that time. Currently, rates are 7.5% for such loans. To hedge against rates falling, the banker buys a 30-day interest-rate floor with a floor rate of 7.5% on a notional amount of $10,000,000. After 30 days, actual rates fall to 7.2%.

What is the expected interest income from the loan each year? How much did the option pay?

Reference no: EM131129425

Questions Cloud

What is the total amount of interest expense : DeWeese Corporation issues $400,000 of 8%, 5-year bonds on January 1, 2010, at 105. Assuming that the straight-line method is used to amortize the premium, what is the total amount of interest expense for 2010?
External and internal examinations at autopsy : Discuss in detail external and internal examinations at autopsy. Identify the differences between both processes. What can we learn specifically from these different processes
What are offender characteristics : What are offender characteristics and how are they used in crime analysis. Provide an example where they were used to monitor criminal activity
Tina cruz and dale commons are discussing : Tina Cruz and Dale Commons are discussing how the market price of a bond is determined. Tina believes that the market price of a bond is solely a function of the amount of the principal payment at the end of the term of a bond.
What is the expected interest income from the loan each year : To hedge against rates falling, the banker buys a 30-day interest-rate floor with a floor rate of 7.5% on a notional amount of $10,000,000. After 30 days, actual rates fall to 7.2%. What is the expected interest income from the loan each year? How mu..
Key aspects of policing activities and operations : Prepare a 1,050- to 1,400-word paper explaining critical issues in policing. Address the following key aspects of policing activities and operations: Dangers of policing and Less-than-lethal weapons
What are the challenges it raises : Discuss some issue of local, national, or international concern and its importance to you. What are the challenges it raises, problems to be addressed, and hopeful outcomes?
What assets are going to deploy to extinguish these fires : You have the option to send EMS in with the SWAT teams, and you have at your disposal EMS from city, county, state, and National Guard agencies. Are you going to send in EMS? If so, with which wave will you send them? If not, why not, and how are ..
Compute inventory turnover and gross profit percentage ratio : Compute the following ratios for 2012 and 2011: Current ratio, Times-interest-earned ratio, Inventory turnover, Gross profit percentage, Debt to equity ratio and Rate of return on common stockholders' equity.

Reviews

Write a Review

Finance Basics Questions & Answers

  Virtue theory-utilitarianism-deontological ethics

Write a 500- to 800-word essay comparing the similarities and differences between virtue theory, utilitarianism, and deontological ethics. Include the following in your essay:

  Construct a comparative balance sheet for contemporary wood

charles royston was checking the year- end balances for his wood furniture manufacturing and retail business and was

  Construct the probability distribution representing

a) Construct the probability distribution representing the different outcomes that are possible for a $1 bet on under 7.b) Construct the probability distribution representing the different outcomes that are possible for a $1 bet on over 7.

  If a firms costs both variable as well as fixed are known

if a firms costs both variable as well as fixed are known with certainty then what are the only two sources of

  A political advisory committee recently recommended

A political advisory committee recently recommended wage and price controls to prevent the spiraling inflation that was experienced in the 1970s. Members of the investment community and several labor unions have sent the committee reports that..

  Currently neither ken nor sandra has disability insurance

1. if a shed valued at 13000 in the backyard is also destroyed in the fire what is the maximum amount that the

  Estimate the value of each division

Estimate Weston’s current equity beta and cost of capital. Is this cost of capital useful for valuing Weston’s projects? How is Weston’s equity beta likely to change over time?

  Impact of corporate culture on leadership

Your local small business association is organizing a workshop centered upon the impact of corporate culture on leadership and corporate strategy.

  You bought a stock one year ago for 50 per share and sold

you bought a stock one year ago for 50 per share and sold ittoday for 55 per share.nbsp it paid a 1 per share

  What is jack weighted average cost of capital

The U.S. Treasury bill is yielding 4 percent and the market risk premium is 7 percent. Jack's tax rate is 35 percent. What is Jack's weighted average cost of capital?

  Calculate pcd return on sales

PCD managers are evaluated and rewarded on the basis of ROI defined as operating income divided by total assets. Barkley Industries expects its divisions to increase ROI each year.

  What is maggie total profit or loss from a long straddle

Describe how Maggie could use straddles to speculate on the euro's value. At option expiration, the value of the euro is $1.30. What is Maggie's total profit or loss from a long straddle position? What is Maggie's total profit or loss from a long str..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd