The contract rate is above the market rate. The contract rate is equal to the market rate.

Q: 6 x 12 forward rate agreements, traded with a AAA-rated counterparty, with a forward rate of 1.14%…

A: The profit of the 6 forward rate agreements can be calculated as follows: (Forward rate - actual…

Q: The difference between the nominal interest rate and the effectiveinterest rate.

A: The nominal interest rate is the interest rate paid annually without compounding period.  The…

Q: When a contract includes an option to buy additional goods or services, when does that option give…

A: Contract: Contract is a written document that creates legal agreement between the parties for buying…

Q: What is the difference in Forward Contracts and Future Contracts

A:

Q: What is the difference between spot rates andforward rates? When is the forward rate at a premium to…

A: Spot rates are the rates that prevail in the cash market or the rates that are applicable today.…

Q: What is the basic difference between floating and fixed exchange rates?

A: Answer: Fixed exchange rate is where, when revaluation or devaluation happens, the exchange rate…

Q: what is fixed-price contract, and what are the benfit of chosing it

A: A contract where the price is fixed as negotiated by the parties is known as a Fixed Price Contract.…

Q: What is a floating rate system?

A: We know that there are two types of rate Fixed Rate System Floating rate system   Fixed Rate…

Q: Give an example assuming that  the Compounding Period equals to Payment Period?

A: The representation on the basis of assumption:

Q: Describe the difference between the forward price and the value of a forward contract?

A: First, let us define a forward contract. Forward contracts are agreements between two parties to buy…

Q: Define each of the following terms: f. Spot rate; forward exchange rate; discount on forward rate;…

A: The spot rate shall be the value of a good, security, or monetary system for immediate payment.…

Q: Is variable consideration included in the calculation of a contract’s transaction price? If so, how…

A:

Q: Is the “forward price” the same thing as the “value of the forward contract” Explain.

A: Derivative is defined as the contract, which are between the two or more parties, who has the value…

Q: The contractual interest rate is alway state as a

A: Contractual Interest Rate Contractual interest rate refer as the rate which helps to determine the…

Q: If the debt is being amortized by equal payments, what is the amortization schedule ?

A: As calculated, Annual installment is $ 88,094.54 Closing Balance = Opening balance + Interest on…

Q: What is the present worth of a uniform series payment?

A: The present worth is the value of an asset at present considering an assumed discount rate, which…

Q: What Is Fixed-Price Contract with Redetermination?

A: A fixed-price contract with prospective price redetermination provides for-       (a) A firm fixed…

Q: The forward contract value today is denoted as  a.Vo(0,T) b.Fo(0,T) c.So(1 + r)^T d.Fo(0,T)/(1 +…

A: Forward contracts are buy or sell agreement between two parties that specify the exchange of asset…

Q: How is duration related to the interest elasticity of a fixed income security? What is the…

A: Duration:A bond's duration is used to evaluate its risk and return characteristics as well as its…

Q: What is the difference between a fixed rate and an adjustable rate money market instrument?

A: Money Market instruments are the financial instruments available to the investor for the short term…

Q: . Which of the following may not be equal to the contract rate of interest? a. stated rate b.…

A: Contract rate of interest is the defined rate of interest on bonds, notes or loan.

Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…

A: The percentage of completion method is an accounting technique in which long-term deed income and…

Q: Describe the Equivalence Calculations with Effective Interest Rates?

A: The effective interest rate is the real interest rate that is charged on the loan amount when the…

Q: Suppose that all possible types of perpetuities (differentiated in payment starting periods and…

A: A perpetual annuity is a policy that you pay indefinitely. In finance, eternity is a constant flow…

Q: difference between Trade Payable and Other Payable with relevant examples

A: Trade Payable and Other Payable are current liabilities of a business to be payable within one…