What is the net cash flow of the swap contract

Reference no: EM13273576

1. Calculate the present value of $100 in 7 years using 9.8% interest rate with continuous compounding.

2. On 6/1/2013, you entered into a semiannual interest rate swap contract, where you pay a fixed rate of 6.2% per annum and receive 6-m LIBOR on a principal amount of $1,000,000. Suppose the 6-m LIBOR rates were 5.7% on 6/1/2013 and 6% on 12/1/2013. What is the net cash flow of the swap contract on 12/1/2013?

Reference no: EM13273576

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