1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Gnesinka [82]
4 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]4 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

You might be interested in
Classify this form of business:
Viktor [21]

Answer:

Limited Liability Partnership / Limited Liability Company.

Explanation:

  • Limited Liability Partnership: A limited liability relationship is a company in which certain or all members have defined obligations, based on the law. Consequently, it can show collaboration and organizational features. Each partner in an LLP is not accountable or liable for any wrongdoing or incompetence of another party.
  • Limited Liability Company: A limited liability company is a management structure whose proprietors are not personally responsible for the obligations or responsibilities of the business. Limited liability corporations are hybrid organizations that combine a company's features with that of a partnership or sole business entity.
7 0
3 years ago
What limits specialization in the global economy?
abruzzese [7]
The answer is "trade barriers"
3 0
3 years ago
Read 2 more answers
A food product is pulled from the consumer market after preliminary testing, before data conclusively proves that it causes panc
raketka [301]

Answer:

The precautionary principle

Explanation:

7 0
3 years ago
The Pak-It-Your-Way Company makes custom packaging of all kinds. The firm has evolved into a big business due to quality and inn
lozanna [386]

Answer:

<u><em>Social Audit</em></u>

Explanation:

The Pak-It-Way Company makes custom packaging of all kinds . The firm has evolved into a big business due to quality and innovative work . Recently , top management asked company departments to list and evaluate the kinds of socially responsible efforts conducted internally and externally in the business and also to list negative occurrences that supervisors observed . Top management is essentially conducting a <u>social</u> <u>audit.</u>

<em>Social audit is an audit to examine how an organisation is behaving or working for its employees , society and environment.</em>

Social audit helps in encouraging the participation of the community , it also helps in encouraging the local democracy, it promotes the decision making and helps in developing the human resources.

Social audit has wide coverage , it is evaluated very systematically , it is always conducted in a regular period of time , it measures the social performance of the organisation towards its employees society and the environment. But social audit is difficult to conduct.

8 0
3 years ago
What is the Head Start Program? A. A teaching method which equips students to regurgitate facts in order to do well on standardi
never [62]

Answer: A federal program that provides academically focused preschool to students of low socioeconomic status.

       

Explanation: Head Start is a U.S. Department of Health and Human Services program that offers extensive early childhood development, healthcare, nutrition, and permissive parenting services to children and families with low incomes.

The services and programs are intended to promote stable and loving relationships, strengthen the emotional and financial well-being of children, and create an atmosphere for the development of good cognitive abilities.                  

7 0
3 years ago
Other questions:
  • Julia, an economics professor, is giving a presentation on her research. what presentation delivery method should julia use if s
    7·2 answers
  • Adel wrote Abdullah, "I will sell you my house and lot at 419 West Lombard Street, San Francisco, California for $950,000 payabl
    10·1 answer
  • What are the opportunity costs of going to the gym for a workout rather than studying for an economics test?
    8·1 answer
  • Suppose a state passes a minimum wage law that increases the minimum wage from $5/hour to $20/hour. The equilibrium wage prior t
    10·1 answer
  • On October 1, 20X4, Shaw Corp. purchased a machine for $126,000 that was placed in service on November 30, 20X4. Shaw incurred a
    12·1 answer
  • Below are the transactions for Ute Sewing Shop for March, the first month of operations.
    11·1 answer
  • A system of accounting for manufacturing operations that produces timely information about inventories and manufacturing costs p
    12·1 answer
  • John Deere is a manufacturer of agriculture equipment. Deere supplies replacement parts to dealerships across the globe. John De
    14·1 answer
  • When Kenneth called Southern Security to buy a safe in which to store important personal documents and possessions, he most like
    9·1 answer
  • When the dollar is worth less in relation to currencies of other countries, are you more likely to buy american-made or foreign-
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!