What will happen to the premium on this cap

Assignment Help Finance Basics

Reference no: EM132177346

Question - Assume that you bought an interest rate cap on three-month LIBOR with a 2.50 percent strike rate. The current rate for three-month LIBOR is 2.28 percent.

a. What will happen to the premium (value) on this cap if LIBOR rises to 3.16 percent? Explain.

b. What will happen to the premium (value) on this cap if LIBOR falls to 2.10percent? Explain.

Reference no: EM132177346

Questions Cloud

Find the current using harmonic balance : ECE6124 Advanced Numerical Techniques in Electromagnetics Assignment - Find the current of R2 using harmonic balance

Write the program to simulate the number of picks needed : Write the program to simulate the number of picks needed to get four cards from each suit and display the four cards picked.

What accounts for these differences : Variables can be allocated in the stack, heap, or statically. What accounts for these differences (e.g., performance)?

Impacted strategic business planning and decision making : How have these regulations impacted strategic business planning and decision making?

What will happen to the premium on this cap : The current rate for three-month LIBOR is 2.28 percent. What will happen to the premium (value) on this cap if LIBOR rises to 3.16 percent? Explain

What we need to do in order to earn our ride is increase : Now that we've managed to weave our way through the North Woods safely and are one step closer to Thanto, our destination.

What will be the amount of capital gains tax on investment : Samuel Jenkins made two investments, the first was 13 months ago, If Samuel is in the 28 percent tax bracket, what will be the amount of capital gains tax

Characteristics of the four basic market models : What are the main characteristics of the four basic market models?

Show how to modify the scheme to make it more secure : A variation of the following biometric authentication protocol was experimentally tested several years ago at immigration checkpoints in major U.S. airports.

Reviews

Write a Review

Required(*) Message

Finance Basics Questions & Answers

Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

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

User Account

All Pages