The 1-year forward price of copper is $ 1/lb. The 1-year continuously compounded interest rate is 6%. One-year option prices for copper are shown in the table below. Strike Call Put 0.95 0.0649 0.0178 0.975 0.05 0.0265 1 0.0376 0.0376 1.025 0.0274 0.0509 1.034 0.0243 0.0563 1.05 0.0194 0.0665 Suppose CDE mines copper, with fixed costs of $ 0.50/lb and variable cost of $ 0.40/lb. If CDE does nothing to manage copper risk: What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $0.80 $ What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 0.90 $ What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 1.00 $ What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 1.10 $ What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 1.20 $ If on the other hand CDE sells forward its expected copper production: What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $0.80 $ What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $0.90 $ What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 1.00 $ What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 1.10 $ What is its profit 1 year from now. per pound of copper, if the copper price in 1 year is $ 1.20 $ ? ? ? ? ? ? ? ? 2 2

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If $3000.00 is invested for seven years and seven months at 6% p.a. compounded quarterly, calculate the maturity value.   Question 11 options:   A)  $4712.57   B)  $4882.57   C)  $4745.43   D)  $3776.32   E)  $3763.18

We know that the market should respond positively to good news and that good-news events such as the coming end of a recession can be predicted with at least some accuracy. Why, then, can we not predict that the market will go up as the economy recovers?

A ten-year floating-rate note (FRN) has coupons referenced to 3-month pound LIBOR, and pays coupon interest quarterly. Assume that the current 3-month LIBOR is 4 percent. If the risk premium above LIBOR that the issuer must pay is 12.5 basis points, the next period's coupon payment on a £1,000 face value FRN will be Group of answer choices £31.25. £82.50. £165.00. £10.31.

A plain vanilla 2-year interest rate swap with annual payments has a notional principal of $1 million. 5 month(s) into the swap, the term structure of interest rates is flat at 4.70%. The first floating-rate payment has already been set to 5.00%. The fixed payments are 5.29%. What is the value of this swap? Please show steps Answer: -8310

A $30,000,000 interest rate swap has a 12-month maturity, and was entered 2 months ago. This means the swap has a remaining life of 10 months. The swap pays interest quarterly, and it stipulates that the fixed rate is 4.5%, while the floating rate is the 3-month LIBOR +1%. Two months ago, when the swap was entered, 3-month LIBOR was 2.9%. The 3-month LIBOR forward rates and continuous time zero-coupon prices are given in a table below. Use the zero coupon prices to discount cash-flows. 3-month LIBOR Forward Rates Term rate 1x4 2.90% 2x5 2.85% 3x6 2.84% 4x7 2.88% 5x8 2.90% 6x9 2.91% 7x10 2.92% 8x11 2.92% 9x12 2.92% Zero-Coupon prices T (month) Price 1 0.9976 2 0.9953 3 0.9929 4 0.9904 5 0.988 6 0.9856 7 0.9831 8 0.9807 9 0.9783 10 0.9761 11 0.9737 12 0.9712 (Important hint: since the swap was entered 2 months ago, and makes quarterly payments, in the remaining 10 months, payments should be expected in 1 month, 4 months, 7 months and 10 months. Discount cash flows accordingly.)…

5. Suppose you have a 2.5-year remaining on an interest rate swap with a notional principal of $10,000, 000 between Company A and Company B. Company A pays fixed rate and Company B pays the float rate. Fixed and float payments are exchanged every year and the last payment was exchanged 6 months ago. The fixed rate is 3.5% per annum, and the floating 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 is 3.50%. Calculate the present value of the fixed and floating legs of the swap, and determine the swap's net present value from Company A's perspective. Assume annual compounding for discounting.

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.

Use the following table of spot rates: Years to Maturity Annual Effective Spot Rate 3.00% 2 3.60% 3. 3.85% 4 4.05% 5. 4.20% For a 2-year-deferred, 3-year interest rate swap with the level notional amount is I million and 1-year spot rate at time 3 is 3%, what is the amount of the net settlement payment at time 4? Is this amount paid by the payer, or by the receiver? O a. 15,950 paid by the receiver Ob. 16,950 pay by the receiver O. 15,950 paid by the payer Od. 16,950 paid by the payer O e. None of the above