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Gnesinka [82]
3 years ago
12

XYZ Corp owns a 3-year $10 million par floating rate bond. The coupons on the bond are 12-month LIBOR. XYZ would like to hedge a

gainst interest rates falling by entering into an interest rate swap with a $10 million notional that receives a fixed rate and pays a floating rate (12-month LIBOR). You are given the following prices for zero coupon bonds. Years to Maturity Zero-coupon Bond Price 1 0.99 2 0.97 3 0.93 Calculate the fixed rate XYZ Corp would receive on the swap.
Business
1 answer:
malfutka [58]3 years ago
3 0

Answer:

 2.45%

Explanation:

The computation of the fixed rate is shown below:

Years to maturity   Zero coupon  bond price  YTM      Forward rate

1                                 0.99                     1.01%  

2                                      0.97                             1.53%       2.06%

3                                      0.93                            2.45%     4.30%

The fixed rate should be equivalent to the YTM of the 3 year bond i.e. 2.45% the same is to be considered

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Which of these contains data that identifies a product?
zmey [24]

Answer:

A. UPC

Explanation:

A UPC is an acronym for universal product code. UPC is typically used for the identification of a specific product and its manufacturer (vendor) through a unique code that is printed on the product.

Basically, a universal product code (UPC) comprises of two (2) main parts;

  • A machine-readable barcode that contains sets of vertical black lines.
  • A unique twelve (12) digit number placed beneath or adjacent to the machine-readable barcode.

The first six-digits of the UPC represents the manufacturer and is printed on all of its products while the next five-digits is the product's unique reference number (item number) and the last digit is typically known as a check digit, used for the verification of the authenticity of a UPC.

Generally, the universal product code are usually scanned with a barcode scanner and this makes it easier to identify a product, as well as its price.

<em>Hence, a universal product code (UPC) contains data that identifies a product. </em>

6 0
3 years ago
Which of the following businesses describes a branch?
Sergio [31]
I believe that it’s C
ANSWER =C
4 0
3 years ago
On July 1, Year 4, Pell Co. purchased Green Corp. 10-year, 8% bonds with a face amount of $500,000 for $420,000. The bonds are c
gayaneshka [121]

Answer:

$21,800

Explanation:

The computation of 4-year revenue is as shown below:-

Bond Income of 4th Year = Face amount × Bond × 1 ÷ 2

= $500,000 × 8% × 1 ÷ 2

= $20,000

Interest Revenue = Bond Income + Amount of Discount Amortized

= $20,000 + $1,800

= $21,800

Therefore for computing the interest revenue we simply bond income with the amount of discount amortized.

6 0
3 years ago
When you finance a car,the car then becomes __ for th loan.
matrenka [14]
The best answer to the question that is being presented above would be collateral. When you finance a car, the car then becomes the collateral or the pledge of the property for the loan. This is so that the payment system is attained securely and to avoid escaping from due payment.
4 0
3 years ago
Read 2 more answers
The U.S. National Treasury issued $3 million of 2.7% bonds, due in 10 years, with interest payable annually at year-end. Calcula
lesya [120]

Answer:

$81000

Explanation:

The calculation is simple. Bond interest is simply calculated by multiplying bond value with the assorted interest rate.

For example

A bond with $1000 value with 5% interest is simply 5% of $1000 = $50

Therefore,

$3,000,000 * 2.7% = $81000

(2.7 % = 0.027)

Hope that helps.

3 0
3 years ago
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