Consider the following plain-vanilla swap. Party A pays a fixed rate 8.29% per annum on a semiannual basis (180/360), and receives from Party B LIBOR + 30basis point. The current six- month LIBOR rate is 7.35% per annum. The notional principal is $25M. What is the net swap payment of Party A? a. $20,000.00 b. $40,000.00 c. $80,000.00 d. $110,000.00

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Consider the following plain-vanilla swap. Party A pays a fixed
rate 8.29% per annum on a semiannual basis (180/360), and
receives from Party B LIBOR + 30basis point. The current six-
month LIBOR rate is 7.35% per annum. The notional principal
is $25M. What is the net swap payment of Party A?
a. $20,000.00
b. $40,000.00
c. $80,000.00
d. $110,000.00
Transcribed Image Text:Consider the following plain-vanilla swap. Party A pays a fixed rate 8.29% per annum on a semiannual basis (180/360), and receives from Party B LIBOR + 30basis point. The current six- month LIBOR rate is 7.35% per annum. The notional principal is $25M. What is the net swap payment of Party A? a. $20,000.00 b. $40,000.00 c. $80,000.00 d. $110,000.00
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