User Account

All Pages

Net interest rate on the loan

Assignment Help Business Management
Reference no: EM131301494

IP Phone, Inc. plans to borrow $80,000,000 for 6 months, three months from now. (In other words, the firm will be getting a 6-month loan in December.) The interest rate on the loan will be LIBOR + 0.75%, but the company is concerned about potential changes in LIBOR over the next 3 months. Currently, 3-month LIBOR is 0.895%, and 9-month LIBOR is 0.978%. Explain how the company can use a forward rate agreement (FRA) to hedge the interest rate risk. Calculate the forward rate for the FRA. What is the payment to or from the firm if 6-month LIBOR is 1.85% in December, and what is the net interest rate on the loan?

Reference no: EM131301494

Questions Cloud

Compute the net interest expense : (a) Compute the net interest expense to bereported for this note and related swap transactions as of December 31, 2014. (b) Compute the net interest expense to bereported for this note and related swap transactions as of December 31, 2015.
Construct a tm that recognizes the non-cfl language : Construct a TM that recognizes the non-CFL language L = {wcw | w is in (0+1)*} and halts on all inputs. Please briefly explain the purpose of each state of your machine. So, for example the string 1110c1110 IS in L but the string 0010c0110 is NOT.
What advantage might there be for employing older employees : Does society need to rethink the traditional notion of retirement?What strategies can managers implement in an effort to manage their older employees effectively? Do you have any examples from where you work?What advantage might there be for employ..
Where would we use an interleaver and how does it work : Often cells and cell site transmitter-antenna parameters are built around a signal level contour. What is the value of this contour in dBµ? Also give this dBµ value in dBm based on a 50 - Ω impedance at 850 MHz.
Net interest rate on the loan : Explain how the company can use a forward rate agreement (FRA) to hedge the interest rate risk. Calculate the forward rate for the FRA. What is the payment to or from the firm if 6-month LIBOR is 1.85% in December, and what is the net interest rat..
Contractionary and expansionary monetary policy : 1. Now that you know the difference between contractionary and expansionary monetary policy, imagine yourself as the Chairman of the Federal Reserve Board of Governors. Which monetary policy do you believe is more appropriate today and why?
Develop a verilog model of one of the ttl chips listed below : Develop a Verilog model of one of the TTL chips listed below. The model should be functionally equivalent, but there will be timing differences. Compare the timing differences between the Verilog FPGA implementation and the TTL chip.
Advise the sampsons on whether they should invest : Explain to the Sampsons why there is a trade-off when investing in bank CDs versus stock to support their children's future college education.
Find worst-case read and write access times for memory : Replace the 8count block used in the tutorial in Chapter 4, with a new counter module written in Verilog. Simulate the design and download a test program to the UP3 board.

Reviews

Write a Review

Business Management Questions & Answers

  Widget inc-s performance compare to industry leaders

How does Widget Inc's performance compare to industry leaders?

  How would you plan to communicate

how would you plan to communicate with your two key clients at ADDITION during the 6-week project? Please describe what you would do, how often, and using what methods of communication.

  Should employers be allow to monitor employees in workplace

Should employers be allowed to monitor employees in the workplace? Should distinctions be made based on whether it is monitoring computers, voice-mail, telephone conversations, personal email, lockers or internet use?

  Recruiting and staffing

Jean Phillips and Stanley Gully illustrate unfair discrimination occurs when employment decisions are based on factors such as race, sex, religion, ethnicity, or a person's disabilities.

  Utility function of an individual

Suppose that the utility function of an individual can be described as U(X,Y) = 4X + 2Y. For this utility function the MRS

  Examples of mobile devices

Explain what mobile devices are and why mobile systems are important. Give examples of mobile devices, and, if applicable, name a mobile device you use and why you use it.

  Anticipated earnings per share

Management estimates that the economy will be fairly normal and thus the firm's earnings before interest and taxes (EBIT) will be $60,000. Assume the share price remains constant and ignore taxes. What is the anticipated earnings per share (EPS) i..

  Corporate finance concept of market efficiency

To evaluate the corporate finance concept of market efficiency, equity issuance and shareholders' wealth as well as supported by the foundation of corporate finance theories.

  Adopt a critical approach to the discussion

You are required to adopt a critical approach to the discussion of the five (5) topics below. These discussions, resembling mini-essays, must be supported with relevant literature

  Evaluation of a recent business decision

Develop a 350-word evaluation of a recent business decision in your work or desired career.  Include the following: Discuss the influence the decision-making process had on the outcome.

  Ethical dilemmas associated with offshoring are plenty.

.Ethical dilemmas associated with offshoring are plenty. Choose one of these dilemmas and make a case either defending your firm's offshoring activities or arguing against such activities

  Illustrate what are the new overall npv-roi and bep

Explain how do I present three possible decision alternatives to address the problem regarding the whistles that were found to have too much lead in them.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd