What is the value of floating rate portion of swap

Assignment Help Financial Management
Reference no: EM131558960

Suppose the current term structure of interest rates is (0.076, 0.073, 0.079, 0082, 0.080). A plain vanilla interest rate swap will make payments at the end of each year equal to the floating short rate that was posted at the beginning of that year. A 5-year swap having a notational principal of $10,000 is being configured.

a) What is the value of the floating rate portion of the swap?

b) what is the swap rate?

Reference no: EM131558960

Questions Cloud

Discuss the pricing of an insurance policy : In the market for most consumer goods and services we assume the law of supply and demand, operating through open competition, determines the price.
The option price using the risk-neutral probabilities : Evaluate the option price using the risk-neutral probabilities from (b).
Analyze a movie that includes a portrayal of mental illness : PROJECT - MOVIE ANALYSIS - MOVIE PROJECT. The objective of this activity is to critically analyze a movie that includes a portrayal of mental illness
Non-programmed decisions : Explain (1) Programmed & (2) Non-Programmed Decisions and give an example of each.
What is the value of floating rate portion of swap : What is the value of the floating rate portion of the swap? what is the swap rate?
Effective organizational system : How is measuring a firm, organization or institution's performance, a complete understanding of the leadership and management dynamics
Define role of information and operating systems at amazon : Has management allocated sufficient resources to the strategy execution effort? Exercised strong leadership to propel strategy execution forward?
Which of the assets are traded in the capital markets : Which of the following assets are traded in the capital markets? The major areas of the finance discipline includes all of the following EXCEPT.
Understanding of the leadership and management dynamics : How is measuring a firm, organization or institution's performance, a complete understanding of the leadership and management dynamics that contribute

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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