MNC-D and MNC-Z both require USD82 million for 6 years. Both MNCs have access to different floating and fixed interest rates. MNC-D is currently paying a floating rate but wants to pay a fixed rate. MNC-Z is currently paying a fixed rate but wants to pay a floating rate. The intermediary to the swap charges 10 basis points (bps) of the total savings available to arrange the swap. The savings split between MNC-D and MNC-Z is 3:1. What is the rate that MNC-D pays to the intermediary? Borrower MNC-Z MNC-D O a. 4.50% O b. 4.60% O c. 4.85% O d. 5.35% Floating Rate LIBOR9 + 0.30% LIBOR9 + 0.10% Fixed Rate 4.50% 5.40%
MNC-D and MNC-Z both require USD82 million for 6 years. Both MNCs have access to different floating and fixed interest rates. MNC-D is currently paying a floating rate but wants to pay a fixed rate. MNC-Z is currently paying a fixed rate but wants to pay a floating rate. The intermediary to the swap charges 10 basis points (bps) of the total savings available to arrange the swap. The savings split between MNC-D and MNC-Z is 3:1. What is the rate that MNC-D pays to the intermediary? Borrower MNC-Z MNC-D O a. 4.50% O b. 4.60% O c. 4.85% O d. 5.35% Floating Rate LIBOR9 + 0.30% LIBOR9 + 0.10% Fixed Rate 4.50% 5.40%
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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