Question

Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving...

Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving a fixed rate of 2.56% annually. The swap is going to last for 4 years. Currently the 4-year Libor is 2.59% on dollars. One year later, Carlton decides to unwind the swap. What is the NPV of the swap if the three-year interest rate(Libor) is 3.02% now? Who pays whom?

A -$855; Carlton pays dealer

B -$13,006.61; Dealer pays Carlton

C $13,006.61; Dealer pays Carlton

D $855; Dealer pays Carlton

E -$13,006.61; Carlton pays dealer


Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving...
Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving a fixed rate of 2.56% annually. The swap is going to last for 4 years. Currently the 4-year Libor is 2.59% on dollars. One year later, Carlton decides to unwind the swap. What is the NPV of the swap if the three-year interest rate(Libor) is 3.02% now? Who pays whom? Select one: -$13,006.61; Carlton pays dealer -$13,006.61; Dealer pays Carlton $13,006.61; Dealer pays Carlton...
Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving...
Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving a fixed rate of 2.56% annually. The swap is going to last for 4 years. Currently the 4-year Libor is 2.59% on dollars. One year later, Carlton decides to unwind the swap. What is the NPV of the swap if the three-year interest rate(Libor) is 3.02% now? Who pays whom? Select one: $13,006.61; Dealer pays Carlton -$855; Carlton pays dealer -$13,006.61; Dealer pays Carlton...
8) Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and...
8) Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving a fixed rate of 2.56% annually. The swap is going to last for 4 years. Currently the 4-year Libor is 2.59% on dollars. One year later, Carlton decides to unwind the swap. What is the NPV of the swap if the three-year interest rate(Libor) is 3.02% now? Who pays whom? Select one: a. -$13,006.61; Carlton pays dealer b. $855; Dealer pays Carlton c....
8)Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving...
8)Carlton, an AAA rated corporate, enters an interest rate swap on $1,000,000, paying Libor and receiving a fixed rate of 2.56% annually. The swap is going to last for 4 years. Currently the 4-year Libor is 2.59% on dollars. One year later, Carlton decides to unwind the swap. What is the NPV of the swap if the three-year interest rate(Libor) is 3.02% now? Who pays whom? Select one: a.-$13,006.61; Carlton pays dealer b.$855; Dealer pays Carlton c.$13,006.61; Dealer pays Carlton...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT