Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$5,721.61
Visitor$980.00
Gisele$936.78
aurora$629.43
Visitor$464.00
Visitor$460.00
Visitor$410.00
Visitor$400.00
Visitor$390.00
Visitor$310.00
Visitor$250.00
Visitor$247.00
Visitor$220.00
Visitor$220.00
lukeh$199.09
Visitor$190.00
Visitor$190.00
Visitor$170.00
Visitor$160.00
tanmaya77$154.33
 

Question 786  fixed for floating interest rate swap, intermediated swap

The below table summarises the borrowing costs confronting two companies A and B.

Bond Market Yields
  Fixed Yield to Maturity (%pa) Floating Yield (%pa)
Firm A 3 L - 0.4
Firm B 5 L + 1
 

 

Firm A wishes to borrow at a floating rate and Firm B wishes to borrow at a fixed rate. Design an intermediated swap (which means there will actually be two swaps) that nets a bank 0.1% and shares the remaining swap benefits between Firms A and B equally. Which of the following statements about the swap is NOT correct?



Question 787  fixed for floating interest rate swap, intermediated swap

The below table summarises the borrowing costs confronting two companies A and B.

Bond Market Yields
  Fixed Yield to Maturity (%pa) Floating Yield (%pa)
Firm A 2 L - 0.1
Firm B 2.5 L
 

 

Firm A wishes to borrow at a floating rate and Firm B wishes to borrow at a fixed rate. Design an intermediated swap (which means there will actually be two swaps) that nets a bank 0.15% and grants the remaining swap benefits to Firm A only. Which of the following statements about the swap is NOT correct?




Copyright © 2014 Keith Woodward