DaimlerChrysler Debt. Chrysler LLC, the now privately held company sold off by DaimlerChrysler, must pay floating-rate interest three months from now. It wants to lock in these interest payments by selling an interest rate futures contract. Interest rate futures for three months from now settled at 93.06, for a yield of 6.94% per annum. a. If the floating interest rate three months from now is 6.03%, what did Chrysler gain or lose on the position? b. If the floating interest rate three months from now is 8.03%, what did Chrysler gain or lose on the position? a. If the floating interest rate three months from now is 6.03%, what did Chrysler gain or lose on the position? If the floating interest rate three months from now is 6.03%, Chrysler will have a V of % on the position. (Select from the drop-down menu. Round to three decimal places and enter a negative number to indicate a loss.)

DaimlerChrysler Debt. Chrysler LLC, the now privately held company sold off by DaimlerChrysler, must pay floating-rate interest three months from now. It wants to lock in these interest payments by selling an interest rate futures contract. Interest rate futures for three months from now settled at 93.06, for a yield of 6.94% per annum. a. If the floating interest rate three months from now is 6.03%, what did Chrysler gain or lose on the position? b. If the floating interest rate three months from now is 8.03%, what did Chrysler gain or lose on the position? a. If the floating interest rate three months from now is 6.03%, what did Chrysler gain or lose on the position? If the floating interest rate three months from now is 6.03%, Chrysler will have a V of % on the position. (Select from the drop-down menu. Round to three decimal places and enter a negative number to indicate a loss.)

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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Similar questions

A corporation is planning to sell its 90 - day commercial paper to investors offering a 10.2 percent yield. If the liquidity premium is estimated to be 0.2 percent, and there is a 0.4 percent tax adjustment. Also, the three month real annualized rate is 5.6 percent and expected inflation is 1.1 percent. What is the appropriate default premium?
You have negotiated a $500.000 Convertible Debt loan from an Angel group. It is convertible into stock when you raise your next equity round, and will convert at a price which is a 25% discount to the next round's premoney valuation. It has a Cap ot $7mm on the Conversion Valuation. A year later, you raise your first equity round at a premoney valuation of Samm. What premoney valuation of your company is used to calculate the conversion of the Angels' loan into equity? O 57.5mm Ct365mm O S7mm O $8.5mm O Sómm
Uliana Company wants to issue new 19-year bonds for some much-needed expansion projects. The company currently has 10.3 percent coupon bonds on the market that sell for $1,143, make semiannual payments, have a par value of $1,000, and mature in 19 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Answer is complete but not entirely correct.
Uliana Company wants to issue new 16-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon bonds on the market that sell for $1,065, make semiannual payments, and mature in 16 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Please solve with financial calculator or HP 10b and show inputs. Please don't use excel.
(c) BingBing Co has borrowed a £25 million money market loan, where the interest rate is LIBOR +300 basis points. It is currently 15th May 20X0 and LIBOR is 2.5%. The interest rate is due to be reset for the following 3 months on the 1st July 20X0 (i.e. LIBOR will be reset). The company wishes to hedge its exposure using short term interest rate futures contracts (STIRS). Assume the actual futures price on the 15th May 20X0 is 97. Calculate and discuss the outcome of the hedge if basis is 0.2 and LIBOR is 3% on the 1st July 20X0. The discussion should include basis risk.
One-year T-bills currently earn 0.46 percent. You expect that one year from now, one-year T-bill rates will increase to 0.50 percent. If the unbiased expectations theory is correct, what should the current rate be on two-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Current rate on two-year Treasury securities
Ignore Sammy. Another derivatives trader, John, took a long position in IRU9 on 04/07/2019 and held it until maturity. When the IRU9 matured in mid-September 2019, John closed his derivative long position and bought the 90-day Bank Bill at the 1% spot rate. What net rate of interest did he earn on his investment? 0.80% 1.00% 2.08% 1.08%
X Co. want to raise $100 million of 5-year debt in the Euro-market where interest is paid annually. It can obtain a 5-yr floating rate note with an interest rate of 1-year LIBOR + 2%. The 1-year LIBOR rate is currently 5%. To hedge the interest rate risk X Co. plans to enter into a collar with a cap rate of 6% and a floor rate of 4%. The notional principal of both the cap and floor is $100 million. The cap premium is 1.4% of the notional principal and the floor premium is 0.5% of the notional premium. What is the worst case all-in-rate that X Co. will pay in total? Answer options: 5.8% 5.2% 9.2% 8.2% 7.2%
4. Suppose that the market rate of interest is 12 per cent on a government bond with a perpetuity payment, which is a coupon value (annual payment) of £6 per year indefinitely. The face value of the loan is £100. a) Define and calculate the price of the bond? Answers.. b) At what yield (or rate) will the loan be trading at par? Explain whether it is trading above or below par in a). Answers... c) Assume that the rate of interest is 'expected' to drop to 3 per cent, derive and calculate the rate of capital gain (or loss)? Answers . d) Derive and explain the expression for the number of bonds held representing the amount of money spent on bonds (B) with the corresponding mean rate of return (HR). Answers.. e) Imagine that W = £40,000, what is the amount spend on bonds, B', if the standard deviation (SD) of earnings (s) is equal to 0.10 with a 3,000,the SD of the total return on bonds, SR. What is the money holding, which is M*? Answers.. Find the mean return on bonds with u = 1. Answer..
A mortgage pass-through security (PT) has a par value of $100,000, a 4% coupon paid monthly, and is based on 30 year mortgages. The current market rate for similar bonds is 3.5%, and prepayments currently equal $100 per month. Assume rates immediately rise to 4.5%, and prepayments drop to $40 as a result. The PT will now be paid off in month 310. What is the price of the PT today? Group of answer choices: $98,323.2214 $184,274.6844 $94,737.4877 $102,365.1248
Alpha and Beta Companies can borrow for a five - year term at the following rates: Alpha Beta Moody's credit rating Aa Baa Fixed - rate borrowing cost 10.3% 12.5% Floating - rate borrowing cost LIBOR LIBOR + 1.1% If there is a swap bank involved and earns 20% of the swap's total benefit. Alpha wants to borrow through floating debts and desires 70% of the total benefit from the swap, and Beta takes the rest of the swap benefit. What is the all-in-cost for Beta through the swap? (if your answer is 10.1%, just enter "10.1").
Uliana Company wants to issue new 15-year bonds for some much-needed expansion projects. The company currently has 7 percent coupon bonds on the market that sell for $1,060, have a par value of $1,000, make semiannual payments, and mature in 15 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Coupon rate %

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