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- Assume Carlton enters into a three-year fixed-for-fixed swap agreement to receive Swiss Franc and pay U.S. dollar annually, on a notional amount of $6,000,000. The spot exchange rate at the time of the swap is SFO.8/$. What is the interest rate Carlton will receive in the swaps? Euro-€ Years Bid 3 3.08 3.12 3.25 Swiss franc Ask Bid Ask 1.68 1.76 U.S. dollar Bid Ask 5.43 Japanese yen Bid Ask 5.46 0.45 0.49 3.29 2.38 2.64 5.54 5.59 0.56 0.59A U.S. company has entered into an interest rate swap with a dealer in which the notional principal is $50 million.The company will pay a floating rate of LIBOR and receive a fixed rate of 5.75 percent. Interest is paid semiannually,and the current LIBOR is 5.15 percent. Calculate the first payment. Assume that floating-rate payments will be madeon the basis of 180/360 and fixed-rate payments will be made on the basis of 180/365.a. $130,308.20, the floating-rate payer will receive b. $130,308.20, the fixed-rate payer will receivec. $50 million, the fixed-rate payer will pay d. $50 million, the floating-rate payer will payAssume Carlton enters into a three-year fixed-for-fixed swap agreement to receive Swiss Franc and pay U.S. dollar annually, on a notional amount of $4,000,000. The spot exchange rate at the time of the swap is SFO.8/$. Assume that one year into the swap agreement Carlton decides it wishes to unwind the swap agreement and settle it in dollars. Assuming that a two-year fixed rate of interest on the Swiss Franc is now 2.59%, and a two-year fixed rate of interest on the dollar is now 5.90%, and the spot rate of exchange is now SFO.0.893/$. To Carlton, what is the net present value (in dollar) of the swap agreement? (Keep the sign and two decimal places.) Years Bid 2 Euro-€ 3 Swiss franc U.S. dollar 3.08 3.12 1.68 1.76 Japanese yen Ask Bid Ask Bid Ask Bid Ask 5.43 5.46 0.45 0.49 3.25 3.29 2.12 2.17 5.54 5.59 0.56 0.59
- Suppose that a commodity’s respective forward prices for 1 year and 2 years are $150 and $158. The 1-year effective annual interest rate is 5.9%, and the 2-year interest rate is 6.6%. You will pay a fixed rate of $153.85906 in a 2-year swap and receive the floating rate. At the time you enter the swap contract, its value to you is... A.$0.0084 B.$–0.0084 C.$0.0051 D.. $–0.0051 E.$000000Calculate the one year forward exchange rate using the direct method: Spot Rate $ 1.4830 / € U.S Libor (1 Year) 2.50 % Euro Libor (1 Year) 4.15 % Explain arbitrage condition underlying your workAssume Carlton enters into a three-year fixed-for-fixed swap agreement to receive Swiss Franc and pay U.S. dollar annually, on a notional amount of $2,000,000. The spot exchange rate at the time of the swap is SFO.8/$. Assume that one year into the swap agreement Carlton decides it wishes to unwind the swap agreement and settle it in dollars. Assuming that a two-year fixed rate of interest on the Swiss Franc is now 2.59%, and a two-year fixed rate of interest on the dollar is now 5.90%, and the spot rate of exchange is now SFO.0.891/$. To Carlton, what is the net present value (in dollar) of the swap agreement? (Keep the sign and two decimal places.) Years Bid 12 Euro-€ 13 3.08 3.25 Ask Swiss franc Bid Ask U.S. dollar Bid Ask Japanese yen Bid Ask 3.12 1.68 1.76 5.43 5.46 0.45 0.49 3.29 2.12 2.17 5.54 5.59 0.56 0.59
- A corporation enters into a five-year interest rate swap with a swap bank in which it agrees to pay the swap bank a fixed rate of 10.30 percent annually on a notional amount of €15,000,000 and receive six- month CME Term SOFR + 0.5 percent. As of the second reset date, determine the price of the swap from the corporation's viewpoint assuming that the fixed rate side of the swap has increased to 10.80 percent. Answer is complete but not entirely correct. Swap price 11Suppose that Banco Bradesco in Brazil would like to enter a swap for USD100,000 three months from now for six months and the following quotes are available. Which of the following statements correctly describes the swap? Exchange Spot Rate BRL/USD 5.05/25 3-month 6-month 12/23 25/36 9-month 47/58 Banco Bradesco buys USD at 5.48 in 3 months' time; and buys BRL at 5.52 in 9 months' time Banco Bradesco buys USD at 5.17 in 3 months' time; and sells BRL at 5.83 in 9 months' time Banco Bradesco buy USD at 5.48 in 3 months' time; and sells BRL at 5.3 in 6 months' time Banco Bradesco buys USD spot at 5.05; and sells BRL at 5.61 at in 6 months' time15) U.S. Bancorp and Wells Fargo & Company entered into the fixed-for floating interest rate swap with the following terms, effective for the reset date:Notional principal: $ 10 millionFixed rate: 6.5%Floating rate: 4.6 % + 220 bpsFrequency of payments: quarterlyWhich of the following is most accurate? Select one: at the settlement date the party which has a floating leg will make a payment of $7 500 at the settlement date the party which has a fixed leg will make a payment of $7 500 at the settlement date the party which has a floating leg will make a payment of $30 000 at the settlement date the party which has a floating leg will make a payment of $680 000, and the party which has a fixed leg will make a payment of $650 000 at the settlement date the party which has a floating leg will make a payment of $170 000, and the party which has a fixed leg will make a payment of $162 500 at the settlement date the party which has a fixed leg will make a payment…
- 2 Assume Carlton enters into a three-year fixed-for-fixed swap agreement to receive Swiss Franc and pay U.S. dollar annually, on a notional amount of $6,000,000. The spot exchange rate at the time of the swap is SFO.8/$. Assume that one year into the swap agreement Carlton decides it wishes to unwind the swap agreement and settle it in dollars. Assuming that a two- year fixed rate of interest on the Swiss Franc is now 2.59%, and a two-year fixed rate of interest on the dollar is now 5.90%, and the spot rate of exchange is now SFO.0.810/$. To Carlton, what is the net present value (in dollar) of the swap agreement? (Keep the sign and two decimal places.) 3 Euro-€ Years Bid Ask Bid Ask Swiss franc 3.08 3.12 1.68 1.76 3.25 3.29 2.12 2.17 U.S. dollar Bid Ask 5.43 5.46 Japanese yen Bid 0.45 5.54 5.59 0.56 Ask 0.49 0.59Tyson Inc. is entering into a 3-year pay-euros and receive-dollars cross currency swap. The 3-year swap interest rates are quoted in the table below. At what rate will Tyson receive dollars and at what rate will Tyson pay euros? Question 8 options: Receive at 2.28% and pay at 1.89% Receive at 2.23% and pay at 1.95% Receive at 2.28% and pay at 1.95% Receive at 2.23% and pay at 1.89%A corporation enters into a five-year interest rate swap with a swap bank in which it agrees to pay the swap bank a fixed rate of 9.90 percent annually on a notional amount of €15,000,000 and receive six-month CME Term SOFR +0.5 percent. As of the second reset date, determine the price of the swap from the corporation's viewpoint assuming that the fixed rate side of the swap has increased to 10.40 percent. Swap price