Reference no: EM131278687
1. Suppose LIBOR3 is 7.93% and LIBOR6 is 8.11%. What is the forward forward rate for a LIBOR3 deposit to be placed in three months?
2. Suppose that Skandinaviska Ensilden Banken (SEB), the Swedish bank, funds itself with three-month Eurodollar time deposits at LIBOR. Assume that Alfa Laval comes to SEB seeking a one-year, fixed-rate loan of $10 million, with interest to be paid quarterly. At the time of the loan disbursement, SEB raises three-month funds at 5.75% but has to roll over this funding in three successive quarters. If it does not lock in a funding rate and interest rates rise, the loan could prove to be unprofitable. The three quarterly refunding dates fall shortly before the next three Eurodollar futures-contract expirations in March, June, and September.
a. At the time the loan is made, the price of each contract is 94.12, 93.95, and 93.80. Show how SEB can use Eurodollar futures contracts to lock in its cost of funds for the year. What is SEB's hedged cost of funds for the year?
b. Suppose that the settlement prices of the March, June, and September contracts are, respectively, 92.98, 92.80, and 92.66. What would have been SEB's unhedged cost of funding the loan to Alfa Laval?
What dollar amount did disney realize from the sale
: At the time of the sale, the exchange rate was ¥124 = $1.- What dollar amount did Disney realize from the sale of its yen proceeds?
|
Discuss an approach to engagement research
: Discuss an approach to engagement research that would encompass the necessary components to your profession or industry. Itemize the areas that must be considered in the future talent pool and how one would design research that answers these quest..
|
What is the range of possible cost savings
: Assuming a notional principal equivalent to $125 million and a current exchange rate of ¥105/$, what do these possible cost savings translate into in yen terms?
|
Draw an adjacency diagram for the original flow table
: Assign the all-Os combination to state A. Draw an adjacency diagram for the original flow table, and write the modified flow table and another adjacency diagram to support your final state-variable assignment.
|
Show how seb can use eurodollar futures contracts
: Show how SEB can use Eurodollar futures contracts to lock in its cost of funds for the year. What is SEB's hedged cost of funds for the year?
|
What application might this circuit have
: Analyze the feedback sequential circuit in Figure X7.87. Break the feedback loops, write excitation equations, and construct a transition and output table, showing the stable total states. What application might this circuit have?
|
What are your ethical challenges
: What are your ethical challenges? What are your options? What is your chosen course of action? What will probably happen as a result of this course of action?
|
What were the volumes of interest and currency swaps
: What were the volumes of interest and currency swaps during the past year? How do these figures compare to those from the previous year?
|
Work breakdown structure
: Project name is Healthy foods. Project consist of fresh fruit juice, fresh vegetable juice, Vegetable salad, Fruit Salad and fruit snacks. Various foods necessary for a healthy life
|