What is the value of the interest rate swap to the party

Reference no: EM13260312

A particular interest rate swap involves one party paying a fixed rate of 2.84% on a notional principal of $95 million to a second party and that party paying a floating rate LIBOR on the same notional amount. On the prior payment date, LIBOR was 2.16%. There is 0.34 years until the next payment date and over the remaining life of the swap an additional six payments will be made every six months thereafter. LIBOR rates with maturities corresponding to the seven remaining payment dates are: 2.23%, 2.31%, 2.36%, 2.42%, 2.47%, 2.51%, and 2.56%, respectively. What is the value of the interest rate swap to the party that receives the fixed-rate payment and pays the floating-rate payment? What is the value of the same interest rate swap to the party that receives floating and pays fixed?

Reference no: EM13260312

Questions Cloud

What would be your estimate of equity beta for frim a : If you find that equity beta is different between Frim A and its comparable firm in (a), how would you explain the difference? If you expect no difference explain why they are not different.

Mineralization-symbiotic relationship-enzymes used in food : A symbiotic relationship is when: All enzymes used in the food industry are: Mineralization. Detecting genetically engineered microorganisms in the environment is difficult because:

How to compute the mass of ice : Consider a glass of 167 mL of water at 29°C. Calculate the mass of ice at -15°C that must be added to cool the water to 10°C after thermal equilibrium is achieved. To find the mass of water use the density of water = 1.0.

What is the immediate dilution effect for new stock issue : The Hamilton Corporation currently has 2 million shares of stock outstanding and will report earnings of $6,700,000 in the current year. The company is considering the issuance of 1 million additional shares that will net $37 per share to the corp..

What is the value of the interest rate swap to the party : What is the value of the interest rate swap to the party that receives the fixed-rate payment and pays the floating-rate payment? What is the value of the same interest rate swap to the party that receives floating and pays fixed?

Define the solution acidic or basic or neutral : Calculate [H3O ], [ClO4-], and [OH-] in an aqueous solution that is 0.110 M in HClO4(aq) at 25 °C. is the solution acidic, basic, or neutral

At what speed would the starlight pass you : If you were on a spaceship traveling a 0.5c away from a star, at what speed would the starlight pass you

Determine the volume of bodily fluid lost per hour : A 60.0-kg runner expends 360 W of power while running a marathon. determine the volume of bodily fluid (assume it is water) lost per hour

Explain gas mixture from the reactions of coal with water : Powdered coal ( essentially pure C ) is reacted with excess water to make a mixture of CO,CO2 and H2 The reaction is desired reaction ,CO2 is an undesired waste product. This gas mixture from the reactions of coal with water is further reacted ove..

User Account

All Pages