Consider a plain vanilla fixed for floating interest rate swap with a notional principal of 4,100,000...
Consider a plain vanilla fixed for floating interest rate swap with a notional principal of 4,100,000 and annual payments. Initially the swap was supposed to last for five years and now three years remain. If the initial fixed rate is 0.09, LIBOR is 0.08, and the year three payment was just made (two years of payments remain on the swap), What is the absolute value of the swap?
Homework Answers
Add Answer to:
Consider a plain vanilla fixed for floating interest rate swap
with a notional principal of 4,100,000...
Consider the following plain vanilla interest rate swap: Volkswagen borrowed $200mm for four years with annual...
Consider the following plain vanilla interest rate swap:
Volkswagen borrowed $200mm for four years with annual payments at a
floating rate of one-year Libor, but now wants fixed rate
liabilities. The World Bank borrowed $200mm for four years with
annual payments of 6%.
1) If two entered into a plain vanilla interest rate swap with
no exchange at time 0, what would the swap rate be? Use the zero
coupon bond prices implied by the yield curve below (assume
continuous...
2) You entered into a plain vanilla swap a while back where you pay 10% per...
2) You entered into a plain vanilla swap a while back where you pay 10% per annum with quarterly compounding on a notional principal of $100,000,000 with payments made quarterly. In exchange, you receive a payment of LIBOR. Your swap has 0.8 years left until its termination date. The LIBOR rate was 14.5% per annum with quarterly compounding when you made your last payment. If today's discount rates are per annum with continuous compounding as followed what is the value...
Alpha Corporation and Horizon Ltd have decided to go into a plain vanilla interest rate swap,...
Alpha Corporation and Horizon Ltd have decided to go into a plain vanilla interest rate swap, Alpha pays a fixed interest rate of 6% pa while Horizon pays floating rate based on Libor rate. The notional amount is $10 Million. Based on the rates given calculate each payoff on semiannual basis lull '2001 | 54% 341201| 65% jan 12003 | I'Y% 3.4 , | 12%.
Alpha Corporation and Horizon Ltd have decided to go into a plain vanilla interest rate swap,...
Alpha Corporation and Horizon Ltd have decided to go into a plain vanilla interest rate swap, Alpha pays a fixed interest rate of 6% pa while Horizon pays floating rate based on Libor rate. The notional amount is $10 Million. Based on the rates given calculate each payoff on semiannual basis lull '2001 | 54% 341201| 65% jan 12003 | I'Y% 3.4 , | 12%.
An interest rate swap has the following specifications: Notional principal = $100m Pay fixed rate (annual...
An interest rate swap has the following specifications: Notional principal = $100m Pay fixed rate (annual basis) = 7% Received rate (annual basis) = LIBOR plus 1% Interest rate calculations are in quarterly basis. Counterparty X entered a pay fixed rate swap on Jan 1, 2019 with Counterparty Y. On Dec 31, 2019, the LIBOR rate is 5.5%. What should be the net cashflow?
Polar Ice has entered into a 10 year interest rate swap with Southern Sun with a notional principal of $500 million. Polar Icehas agreed to pay LIBOR – the floating rate side of the swap. Southern Sun...
Polar Ice has entered into a 10 year interest rate swap with Southern Sun with a notional principal of $500 million. Polar Icehas agreed to pay LIBOR – the floating rate side of the swap. Southern Sun has agreed to pay a fixed rate of 5%. Assume that next year, LIBOR is 5.5%. The net payment at that date will be: a. Polar Ice pays Southern Sun $5,000,000 b. Polar Ice pays Southern Sun $750,000 c. Polar Ice pays Southern...
Consider the following swap. Party A will pay after 6 months (182 days) a fixed rate...
Consider the following swap. Party A will pay after 6 months (182 days) a fixed rate 7.50 percent per annum on a semiannual basis, and receives from Party B LIBOR + 40 basis points. The current six-month LIBOR rate is 6.75 percent per annum. The notional principal is 50 million dollars. 2) a) Compute the fixed and floating rate payments. 2) b) What is the net payment and which party makes it?
Interest rate swap
SNAP agrees to pay 1.5% per annum on a notional $8 million at 6 month intervals for 10 years. In return SNAP will receive a floating rate on the $8 million over the same time perid from HSBC. HSBC will pay floating=LIBOR+ 25bp =(LIBOR+0.25%). Current LIBOR is quoted at 1% per annum.What is the floating rate HSBC pays?Who is long?Who is short?At the first swap interval (6 month), what is the net payment and by whom?
Consider the following information about an interest rate swap: two-year term, semiannual payment, fixed rate =...
Consider the following information about an interest rate swap: two-year term, semiannual payment, fixed rate = notional USD 10 million. Calculate the net coupon exchange for the first period if LIBOR is 5% at the beginning of the period and 5.5% at the end of the period Q2. 6%, floating rate = LIBOR + 50 basis points, A. Fixed-rate payer pays USD 0 B. Fixed-rate payer pays USD 25,000 C. Fixed-rate payer pays USD 50,000 D. Fixed-rate payer receives USD...
4. A French wine maker is considering a currency swap that will call for the firm...
4. A French wine maker is considering a currency swap that will call for the firm to pay dollars and receive Euros. The dollar notional principal will be $100 million. The swap calls for semiannual payments with a 180/360 adjustment. The current exchange rate is $1.60/ The term structure of the dollar and Euro LIBOR on the day of swap initiation is as follows # of days until payment | Dollar LIBOR ( Euro LIBOR 180 360 540 720 7.00...
Consider the following plain vanilla interest rate swap:
Volkswagen borrowed $200mm for four years with annual payments at a
floating rate of one-year Libor, but now wants fixed rate
liabilities. The World Bank borrowed $200mm for four years with
annual payments of 6%.
1) If two entered into a plain vanilla interest rate swap with
no exchange at time 0, what would the swap rate be? Use the zero
coupon bond prices implied by the yield curve below (assume
continuous...
2) You entered into a plain vanilla swap a while back where you pay 10% per annum with quarterly compounding on a notional principal of $100,000,000 with payments made quarterly. In exchange, you receive a payment of LIBOR. Your swap has 0.8 years left until its termination date. The LIBOR rate was 14.5% per annum with quarterly compounding when you made your last payment. If today's discount rates are per annum with continuous compounding as followed what is the value...
Alpha Corporation and Horizon Ltd have decided to go into a plain vanilla interest rate swap, Alpha pays a fixed interest rate of 6% pa while Horizon pays floating rate based on Libor rate. The notional amount is $10 Million. Based on the rates given calculate each payoff on semiannual basis lull '2001 | 54% 341201| 65% jan 12003 | I'Y% 3.4 , | 12%.
Alpha Corporation and Horizon Ltd have decided to go into a plain vanilla interest rate swap, Alpha pays a fixed interest rate of 6% pa while Horizon pays floating rate based on Libor rate. The notional amount is $10 Million. Based on the rates given calculate each payoff on semiannual basis lull '2001 | 54% 341201| 65% jan 12003 | I'Y% 3.4 , | 12%.
Consider the following information about an interest rate swap: two-year term, semiannual payment, fixed rate = notional USD 10 million. Calculate the net coupon exchange for the first period if LIBOR is 5% at the beginning of the period and 5.5% at the end of the period Q2. 6%, floating rate = LIBOR + 50 basis points, A. Fixed-rate payer pays USD 0 B. Fixed-rate payer pays USD 25,000 C. Fixed-rate payer pays USD 50,000 D. Fixed-rate payer receives USD...
4. A French wine maker is considering a currency swap that will call for the firm to pay dollars and receive Euros. The dollar notional principal will be $100 million. The swap calls for semiannual payments with a 180/360 adjustment. The current exchange rate is $1.60/ The term structure of the dollar and Euro LIBOR on the day of swap initiation is as follows # of days until payment | Dollar LIBOR ( Euro LIBOR 180 360 540 720 7.00...
Most questions answered within 3 hours.
-
Explain Mertons concept of anomie is and what the
modes of adaptation to it are?
asked 37 minutes ago -
Jamie is doing a survey at her school about whether the students
feel the cafeteria food...
asked 2 hours ago -
How many liters of 0.669 M KOH will be needed to raise the pH of
0.339...
asked 4 hours ago -
A liquid of density 1270 kg/m 3 flows steadily through a pipe of
varying diameter and...
asked 4 hours ago -
Questions: What should the American executive do?
'A visiting American executive finds that a foreign subsidiary...
asked 4 hours ago -
Activity based costing was introduced as an alternative to
absorption costing.
1. Discuss using illustration the...
asked 4 hours ago -
1. You own shares of Crane DVD Company and are interested in
selling them. With so...
asked 4 hours ago -
How many grams of He are necessary to fill a balloon having a
volume of 4.5E3...
asked 4 hours ago -
The 2 patients, still in the hospital, were interviewed by a
MoH epidemiologist. The interviews revealed...
asked 4 hours ago -
An uncharged capacitor and a resistor are connected in series to
a source of emf. If...
asked 5 hours ago -
If assets are $540,000 and liabilities are $236,000 what is the
amount of owner’s equity?
asked 4 hours ago -
MATH 3421 Maple Assignment 1 Due February 13, 2019 Maple is a
Computer Algebra System that...
asked 5 hours ago