Assume Carlton enters into a three-year fixed-for-fixed swap agreement to receive Swiss Franc and pay U.S. dollars annually, on a notional amount of $8,000,000. The spot exchange rate at the time of the swap is SF0.8/$. Assume that one year into the swap agreement, Carlton decides it wishes to unwind the swap agreement and settle it in dollars. Assuming that a two-year fixed rate of interest on the Swiss Franc is now 2.59%, and a two-year fixed rate of interest on the dollar is now 5.90%, and the spot rate of exchange is now SFO.72/$. To Carlton, what is the swap agreement's net present value (in dollars)? (Keep the sign and two decimal places.) Euro-€ Swiss franc U. S. dollar Japanese yen Years Bid Ask Bid Ask Bid Ask Bid Ask 2 3.08 3.12 1.68 1.76 5.43 5.46 0.45 0.49 3 3.25 3.29 2.12 2.17 5.54 5.59 0.56 0.59 MacBook Pro
Assume Carlton enters into a three-year fixed-for-fixed swap agreement to receive Swiss Franc and pay U.S. dollars annually, on a notional amount of $8,000,000. The spot exchange rate at the time of the swap is SF0.8/$. Assume that one year into the swap agreement, Carlton decides it wishes to unwind the swap agreement and settle it in dollars. Assuming that a two-year fixed rate of interest on the Swiss Franc is now 2.59%, and a two-year fixed rate of interest on the dollar is now 5.90%, and the spot rate of exchange is now SFO.72/$. To Carlton, what is the swap agreement's net present value (in dollars)? (Keep the sign and two decimal places.) Euro-€ Swiss franc U. S. dollar Japanese yen Years Bid Ask Bid Ask Bid Ask Bid Ask 2 3.08 3.12 1.68 1.76 5.43 5.46 0.45 0.49 3 3.25 3.29 2.12 2.17 5.54 5.59 0.56 0.59 MacBook Pro
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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hi i need help on this hw assignment ive been stuck on it for the past hour i know the answer is 854,002.82 but i just don't know how to do it step by step
Transcribed Image Text:Assume Carlton enters into a three-year fixed-for-fixed swap agreement
to receive Swiss Franc and pay U.S. dollars annually, on a notional
amount of $8,000,000. The spot exchange rate at the time of the swap
is SF0.8/$. Assume that one year into the swap agreement, Carlton
decides it wishes to unwind the swap agreement and settle it in dollars.
Assuming that a two-year fixed rate of interest on the Swiss Franc is
now 2.59%, and a two-year fixed rate of interest on the dollar is now
5.90%, and the spot rate of exchange is now SFO.72/$. To Carlton, what
is the swap agreement's net present value (in dollars)? (Keep the sign
and two decimal places.)
Euro-€
Swiss franc
U. S. dollar
Japanese yen
Years
Bid Ask
Bid
Ask
Bid
Ask
Bid
Ask
2
3.08
3.12
1.68
1.76
5.43
5.46
0.45
0.49
3
3.25
3.29
2.12
2.17
5.54 5.59
0.56
0.59
MacBook Pro
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