Ganado's Cross-Currency Swap: SFr for US$. Ganado Corporation entered into a 3-year cross-currency interest rate swap to receive U.S. dollars and pay Swiss francs. Ganado, however, decided to unwind the swap after one year-thereby having two years left on the settlement costs of unwinding the swap after one year. Repeat the calculations for unwinding, but assume that the following rates now apply: The notional principal in Swiss francs is SFr. (Round to the nearest Swiss franc.) Data table (Click on the icon to import the table into a spreadsheet.) Assumptioms Notional principal Original spot rate (SFr/$) New (1-year later) spot (SFr/$) New fixed US$ interest New fixed Swiss franc interest Values $10,000,000 1.4500 1.5000 5.20% 2.20% Print Swap Rates Original: US dollar Original: Swiss franc Done 3-Year Bid 5.56% 1.93% 3-Year Ask 5.59% 2.01%

Ganado's Cross-Currency Swap: SFr for US$. Ganado Corporation entered into a 3-year cross-currency interest rate swap to receive U.S. dollars and pay Swiss francs. Ganado, however, decided to unwind the swap after one year-thereby having two years left on the settlement costs of unwinding the swap after one year. Repeat the calculations for unwinding, but assume that the following rates now apply: The notional principal in Swiss francs is SFr. (Round to the nearest Swiss franc.) Data table (Click on the icon to import the table into a spreadsheet.) Assumptioms Notional principal Original spot rate (SFr/$) New (1-year later) spot (SFr/$) New fixed US$ interest New fixed Swiss franc interest Values $10,000,000 1.4500 1.5000 5.20% 2.20% Print Swap Rates Original: US dollar Original: Swiss franc Done 3-Year Bid 5.56% 1.93% 3-Year Ask 5.59% 2.01%

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
Company A (a U.S. MNC) wants to borrow £10,000,000 at a fixed rate for five year. Company B (a U.K. MNC) wants to borrow $16,000,000 at a fixed rate for five year. Today's exchange rate is £1- $1.6. The information below summarizes what each company can do without using swaps. Company A Company B $ Loans 8 10.6 £ Loans 11.6 12.4 If Company A wants to save 0.3% of the £10,000,000 loan through a Swap Bank, and If Company B wants to save 0.2% of the $16,000,000 loan through a Swap Bank. How much can the Swap bank earn on pound (£) loans (in terms of %) after meeting Company A and Company B's demand? (if your answer is 1.34%, just enter "1.34". If your answer is -1.34%, just enter"-1.34").
Netflix company has entered into a plain vanilla interest rate swap on $2,500,000 notional principal. The company pays fixed rate of 7.0% on payments that occur at 60-day intervals. Six payments remain with the next one due in exactly 60 days. On the other side of the swap, the company receives payments based on the LIBOR rate. Describe the transaction that occurs between the company and the dealer at the end of the first period if the appropriate LIBOR rate is 8.5%.
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 $4,000,000. The spot exchange rate at the time of the swap is SF0.8/$. 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 SF0.54/$. To Carlton, what is the swap agreement's net present value (in dollars)? two decimal places.) (Keep the sign and Euro-€ Swiss franc U. S. dollar Japanese yen Years Bid Bid Ask Bid Ask Ask Bid Ask 2 3.08 3.12 1.76 1.68 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
Suppose you have a 2.5-year remaining on an interest rate swap with a notionalprincipal of $10, 000, 000 between Company A and Company B. Company A pays fixed rateand Company B pays the float rate. Fixed and float payments are exchanged every year andthe last payment was exchanged 6 months ago. The fixed rate is 3.5% per annum, and thefloating rate is tied to the annual LIBOR. The previous 1-year LIBOR rate, set 6 months ago,is 2.75%, 6 month LIBOR is 3.25%. the 1.5-year LIBOR is 3.25%, and the 2.5-year LIBOR is3.50%.Calculate the present value of the fixed and floating legs of the swap, and determine the swap’snet present value from Company A’s perspective. Assume annual compounding for discounting.
The current spot exchange rate is AUD 1.4925 = USD1. The Australian risk-free rate is 1.5% p.a. compounded continuously, whereas the US risk-free rate is 2.2% p.a. compounded continuously. The no-arbitrage price on a 9-month forward contract written on the exchange rate is likely to be _______________ AUD 1.485 / USD USD 0.667 / AUD AUD 0.674 / USD AUD 1.500 / USD
2 Assume Carlton enters into a three-year fixed-for-fixed swap agreement to receive Swiss Franc and pay U.S. dollar annually, on a notional amount of $6,000,000. The spot exchange rate at the time of the swap is SFO.8/$. 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.0.810/$. To Carlton, what is the net present value (in dollar) of the swap agreement? (Keep the sign and two decimal places.) 3 Euro-€ Years Bid Ask Bid Ask Swiss franc 3.08 3.12 1.68 1.76 3.25 3.29 2.12 2.17 U.S. dollar Bid Ask 5.43 5.46 Japanese yen Bid 0.45 5.54 5.59 0.56 Ask 0.49 0.59

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