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
Reptile [31]
3 years ago
9

Assume that you have an outstanding 100M loan with your bank under which you pay 5% fixed rate. Assume also that you have entere

d into a swap agreement for a notional of 100M USD under which every 6 months you agree to pay LIBOR and receive 4% fixed. On the date you signed the contract LIBOR is 3%. The exchange of payments under the swap have the effect of modifying your liabilities so that a. you end up having a loan that costs LIBOR - 100 bps floating rate. b. you end up having a loan that costs LIBOR 100 bps floating rate. c. you end up having a loan that costs 4% fixed rate. d. you end up having a loan that costs 6% fixed rate.
Business
1 answer:
Mazyrski [523]3 years ago
8 0

Answer:

You will end up with 1% or 100 basis points + LIBOR floating rated loan      

Explanation:

You will have to pay interest on loan at a fixed rate of -5%  

transaction with the Swap dealer      

you will have to pay dealer LIBOR that is   -LIBOR  

(Payment is to be outflow so the negative sign is used)      

     

Dealer will pay and you will receive    fixed +4%  

Net interest = -5%-LIBOR+4%      

-1%- LIBOR      

So the Net effect is that you will end up with 1% or 100 basis points + LIBOR floating rated loan      

     

You might be interested in
Spectacular Corporation began the year with accounts​receivable, inventory, and prepaid expenses totaling $67,000. At the end of
bixtya [17]

Answer:

Explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net income $82,000

Adjustment made:

Add : Depreciation expense $10,000

Less  : Gain on the sale of land ($3,000)

Less: Increase in current assets -$11,000 ($78,000 - $67,000)

Less: Decrease in current liabilities -$1,000 ($43,000 - $44,000)

Total of Adjustments -$5,000

Net Cash flow from Operating activities $77,000

6 0
3 years ago
Which act covering most private-sector employers prohibits certain unfair labor practices, such as a union's refusal to bargain
kolezko [41]
The correct option is C.
The Taft Hartley Act is a United States federal law which limits the activities and powers of labour unions. The Act was enacted in 1947 and it prohibits some union practices, it also requires improvement in union disclosure of political and financial dealings. <span />
5 0
3 years ago
Mickey and Jenny Porter file a joint tax return, and they itemize deductions. The Porters incur $2,300 in investment expenses. T
Veseljchak [2.6K]

Answer:

$3500 is deductible

Explanation:

The question is not complete . Please see the solution below :

The Investment Interest expense can be set off against Net Investment income ( Interest income - Investment expenses i.e $25000-$2000=$23000) to the extent and the remaining is carried forward to the next year. so here the investment interest expense is wholly set off against the interest income i.e $3500 is deductible

4 0
4 years ago
The combination of product lines offered by a manufacturer is called the firm's:
aliina [53]

Answer:

product mix

Explanation:

The combination of product lines offered by a manufacturer is called the firm's: product mix.

7 0
2 years ago
If a marketing manager queries a marketing information system to determine the effect of three different levels of price for a n
9966 [12]

Answer:

sensitivity analysis

Explanation:

Based on the information provided within the question it can be said that in this scenario the marketing manager would be using sensitivity analysis. This is a method of analyzing the uncertainty outputs that a mathematical model will have on something. Which in this case would be the different price levels on a new product.

6 0
3 years ago
Other questions:
  • Local Co. has sales of $ 10.8 million and cost of sales of $ 5.7 million. Its​ selling, general and administrative expenses are
    12·1 answer
  • The annual percentage rate on a credit card determines _______.
    11·2 answers
  • Consider the following scenario. Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours
    8·1 answer
  • Collins offers to sell to Phillip an antique chest of drawers worth more than $2,500. Philip agrees to buy the chest an signs a
    11·1 answer
  • Mason Company paid its annual property taxes of $240,000 on February 15, 20X9. Mason also anticipates that its annual repairs ex
    12·1 answer
  • Ted and Lisa are selling their home and have signed a listing agreement. Client or customer? Steven visits Ted and Lisa's open h
    6·1 answer
  • The larger the purchase, the less time businesses spend comparing vendors.<br><br> True<br> False
    15·1 answer
  • What is 2 + 5<br> help<br> pls
    11·2 answers
  • A stock dividend ______. (Check all that apply.) Multiple select question. causes retained earnings to decrease. increases a sto
    7·1 answer
  • What report shows which web pages get the most traffic and highest engagement?.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!