User Account

All Pages

What is the formula for the change in the value

Assignment Help Business Economics
Reference no: EM133082510

A dealer has a 1-year interest rate swap, fixed payer, at LIBOR, beginning in September. The swap resets quarterly. Describe the expected swap payments in percentage terms, with the correct signs, assuming the spot yield curve below. 

Month

Spot yield

Forward yields

Fixed side rate

Expected floating side rates

Spot

2%

 

 

 

December

3%

 

 

 

March

4%

 

 

 

June

5%

 

 

 
  • Construct a table showing the forward rates and the associated futures prices in September.Long or short?
  • Suppose the forward rates all increase by 1% in October.
  • Construct a second table showing the September rates and futures prices, the October rates and futures prices, and the futures gains and losses by contract month.
  • What is the formula for the change in the value of the dealer's book in October?

Reference no: EM133082510

Questions Cloud

What is the best course of action : Based on your knowledge of corporate social responsibility, as well as supply chain logistics, what is the best course of action in this situation? Discuss.
Knowledge of post-acquisition integration : Based on your knowledge of post-acquisition integration, what are your immediate and long-term concerns? What actions might you take? Discuss.
Determine the z-values : The accounting department at Weston Materials Inc., a national manufacturer of unattached garages, reports that it takes two construction workers a mean of 39 h
Considering two pricing strategies : Suppose Mattel, the producer of Barbie dolls and accessories (sold separately), has two types of consumers who purchase its dolls: low-value consumers and high-
What is the formula for the change in the value : A dealer has a 1-year interest rate swap, fixed payer, at LIBOR, beginning in September. The swap resets quarterly. Describe the expected swap payments in perce
Distributed between the x and y sectors in equilibrium : a. How is labor distributed between the X and Y sectors in equilibrium? Suppose: PX increases by 200% and Py by 100%.
Factor markets and unemployment in ldcs : This is a four-part question relating to factor markets and unemployment in LDCs:
Describe the intuition behind the maximum : Describe the intuition behind the maximum likelihood estimation technique used for limited dependent variable models. Why do we not use OLS to estimate the limi
Find nash equilibria of game : Suppose that Anne and Bob must simultaneously name a number in the set { 1, 2, . .., 10}. If they name the same number, the each get a payoff of 1; if they name

Reviews

Write a Review

Business Economics Questions & Answers

  Explain what happens to observed prices in posted offer

Explain what happens to observed prices in posted offer and double auction markets when there at least two sellers.

  What policy action could it posibaly take now

If the goverment of Langkawi decides that it cannot wait for the economy to self-correct in the long-run, what policy action could it posibaly take now? what trade offs,if any, will it have to be prepared to make in term of economic outcomes?

  Regardless of sales levels

A tobacco company is interested in hiring a salesperson to promote smoking cigarattes in nightclubs. The position pays a flat salary of $50,000, regardless of sales levels. The firm has two applicants, predictable Patty and Risky Ricky. Now assume bo..

  How could the us achieve higher economic growth

Assess your response in 4 using 2 variables (any 2 variables you desire) from Gapminder World to support your answer in 4. Again show the graph for the U.S. and the other country of your choice [be creative]. Scrutinize how could the U.S. achieve ..

  Q1 what action can firms to take to ensure that they

q1. what action can firms to take to ensure that they realize whatever economies of scale are created by their volume

  Process of economic decision making today

Behavioral bias is emotional bias and its not correct pure rational behavioral is process of economic decision making today i will decide as per economic

  Define the nature of price controls

Please define the nature of price controls, and then discuss their expression as a price ceiling and a price floor, as well as the basic economic impacts

  What has caused the high population growth

What has caused the High population growth and low level economic development in Africa?

  What is the capitalized cost

(a) What is the capitalized cost of this project if the interest rate is 8%?

  Changes in quantity demands by consumers

Demand elasticity is actually a quantitative measurement designed to show percentage changes in quantity demands by consumers.

  Integrated logistics management

What is meant by the term "integrated logistics management" from either a military or commercial point of view?

  What minimum guaranteed mileage should layton announce

Layton Tire and Rubber Company wishes to set a minimum mileage guarantee on its new MX100 tire. Tests reveal the mean mileage is 67,900 with a standard deviation of 2,050 miles and that the distribution of miles follows the normal probability distrib..

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