PT. Bro agreed to pay Bank Bos a fixed interest rate of 6% per annum with a contract fund of $ 10,000,000 and Bank Bos agreed to pay PT. Bro the annual LIBOR interest rate with the same fund contract. It is predicted that the first year's LIBOR interest rate is 4% and then 5%, 6%, 7% and 6.5%. Make cash flow from interest rate swaps and who will get and how much profit.

PT. Bro agreed to pay Bank Bos a fixed interest rate of 6% per annum with a contract fund of $ 10,000,000 and Bank Bos agreed to pay PT. Bro the annual LIBOR interest rate with the same fund contract. It is predicted that the first year's LIBOR interest rate is 4% and then 5%, 6%, 7% and 6.5%. Make cash flow from interest rate swaps and who will get and how much profit.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 24P

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