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In an interest rate swap, a financial institution has agreed to pay 3.5% per annum and to receive three-month LIBOR in return on a notional principal of $100 million, with payments exchanged every three months.
There are 4 swap cash flows: in 3 months, 6 months, 9 months and 12 months.
Today's 3M Libor is 4% with quarterly compounding. Three month forward LIBOR for all maturities is currently 4% with quarterly compounding. OIS rates (zero rates used for computing discount factors) for all maturities are currently 1.0% with continuous compounding.
What is the present value of the swap?
A company is expected to grow its dividends as follow Year 1 $0.56
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write 400ndash600 words that respond to the following questions with your thoughts ideas and comments. this will be the
What could be expected should the government plan to apply an expansionary fiscal policy
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