None 5. Find the swap rate of 1.5-year plain vanilla swap 3 months after initiation with the followingcharacteristics: N = $100, semi-annual payments, and price is $0.4044. The floating leg isreferenced to the 6-month LIBOR, which was at 5% 3 months ago.TZ(O,T)0.250.98400.50.97300.750.965010.94401.250.93901.50.9340a. 4.9%b. 4.7%c. 4.8%d. 5.1%e. 5.0%

Given that the present value of the fixed leg is $0.4044, we can set up the equation:0.4044 = (0.5 *…

Answered: 5. Find the swap rate of 1.5-year plain…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

If $4,000 is borrowed today and $8,955 is paid back in 10 years, what interest rate compounded annually has been earned? % Round entry to one decimal place. Tolerance is ±0.2.
Gabe purchases a $500 bond that has 6 remaining semi-annual 6% coupon payments for $450. What would be his return per half year period? Round entry to 1 decimal place. The tolerance is ±0.4.
A plain vanilla interest rate swap is written on a notional principal of €100m. The swap pays 3.6% per annum in return for the 3-month LIBOR. Payments are made every 6 months and the swap has 10 months remaining to maturity. The 3-month LIBOR 2 months ago was 3.2% per annum. The swap rate for all maturities is currently 3.8% with continuous compounding. What is the value, in Euros, of the swap to the party paying floating? a. -119,195.16 b. 1,941,376 c. 82,477.03 d. 83,001.04 e. -82,477.00
No tables, ONLY FORMULAS, PLEASE Correct answers; (i) ?^(2) =0.060602?(1/2)a, (ii) ?^(1/3) = 0.14359??, (iii) ?^(12) = 0.11881??, (iv) ? = 0.23881?2?
(Please do the natural calculation) Because of peso devaluation, a car costing P175,000 is to be purchased through a finance company instead of paying cash. If the buyer is required to pay P40.000 as down payment and P4.320 each month for four years, what is the effective interest rate in the diminishing balance?
Today an investor withdraw P50,000.00 representing the accrued amount of his investment that matured. If he invests at 10% semi-annually for 10 years, how much did he invest in pesos? P18,750 P18,845 P19,700 P17,600
Sandra has just signed a 7-year lease for her new business. The full annual lease amount is due at the beginning of every year and such cash flows have been agreed to be 17030 dollars now and the subsequent payments to increase by 4% per year until maturity. Given that the prevailing average market interest rate is 8% per year compounded monthly, compute the present value of this financial asset. (note: round your answer to the nearest cent and do not include spaces, currency signs, or commas) The answer is 105913.82, I'm just not sure how to get there.
Last month Jim purchased $10.200 of US Treasury bonds (their face value was $10,200). These bonds have a 28-year maturity period, and they pay 2.0% interest every three months (ie the APR is 8%, and Jim receves a check for $204 every three months). But interest rates for similar securities have since risen to a 12% APR because of interest rate increases by the Federal Reserve Board. In view of the interest-rate increase to 12%, what is the current value of Jim's bonds? The current value of Jin's bonds is (Round to the nearest dollar )
An amortization of a debt is in a form of a gradient series of P10,000 on the first year, P9,500 on the second year, P9,000 on the third year, P8,500 on the fourth year. Determine the equivalent present worth of the debt if interest is 0.16. Note: Interest is already shown in decimal form. Do not round in between solution and no need to put UOM. Final answer round to the nearest WHOLE NUMBER.
Your Uncle Jimbo is willing to lend you $300 so you can buy a textbook. However, he expects $350 by the end of the week. a) What is the nominal rate? b) What is the effective annual rate?
42 years ago the maximum earnings of a worker subject to Social Security tax (SST) was $11,000. The maximum earnings subject to SST now is $117,200. What compound annual increase has been experienced over this 42-year period of time? How does it compare with a 3% annual increase in the consumer price index over the same period of time? The compound annual increase in SST over 42 years is %. (Round to two decimal places.) The increase in SST over 42 years is the 3% annual increase in the consumer price index.
You, as the head of the derivatives division in an Investment bank, are trying to price a 6-month quarterly Interest rate swap contract with the notional amount of 100 million. Today (Jul 1, 2007) you observe the annualized 3-month LIBOR of 5.0% that is used for this quarter and the Eurodollar future price of $82 for the next quarter found from CMEgroup.com. You use the actual number of days per 360 basis for each period and found 92 days for both periods. The terms of the swap contracts specify the quarterly payments for floating cash flow. Determine the present value (P) of floating payments at the inception of the swap. 9 million <= PV O 7.5 million <= PV < 9 million O 6 million <- PV < 7.5 million 4.5 million <- PV < 6 million O PV < 4.5 million

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS