Explain interest rate risk, Operation Management

Assignment Help:

Please give a detailed explanation on the following scenario: You are a swap dealer and know that XYZ County finance director is clueless about how to conduct interest rate risk management. If you pitch a $250,000,000 interest rate swap transaction, your personal take home compensation is $250,000. You know that you can sell the deal based on the fear of future rate increases. However, you also know that if interest rates increase, the county finances are actually better off due to floating rate assets held by the county. Thus, if the deal is done, the county finance director believes there is less interest rate risk based on your sales pitch. However, the county actually has more interest rate risk and you have your $250,000 commission. If the deal is not done, the county has less interest rate risk and you have nothing (but your integrity). What do you do? Please give a detailed explanation.


Related Discussions:- Explain interest rate risk

Explain what is corporate governance, What is corporate governance? What ro...

What is corporate governance? What role does corporate governance play in strategic planning? Why is it important? Explain your answer and provide an example.

Define and analyze a best practice human capital acquisition, Identify and ...

Identify and analyze a best practice human capital acquisition, development, and retention in the United Kingdom Please provide references in APA format

Explain the company is expected to maintain growth rate, The Lo Tech Co. ju...

The Lo Tech Co. just issued a dividend of $2.30 per share on its common stock. The company is expected to maintain a constant 7 percent growth rate in its dividends indefinitely.

Give a specific definition of time study, Give a specific definition of tim...

Give a specific definition of time study. Time study It is defined as a work measurement technique for recording the times and rate of working for the component of a speci

Process selection, Process Selection There are many production proces...

Process Selection There are many production processes moreover a part or a component can be manufactured by two or more processes. The process engineer should select a proces

Scope overview as well business case sections of the project, The scope ove...

The scope overview and business case sections of the project charter provide the high-level "what and why" of the project

Explain what problems does diversity present, Individual diversity is an im...

Individual diversity is an important concept in organizational behaviour. People can be described by a number of categories that are both inherent (e.g., age, race, gender, ethnici

Process planning procedure, Process Planning Procedure  The process pl...

Process Planning Procedure  The process planning procedure has the followings steps as shows in figure as

Explain how contracting fits into the acquisition program, Describe how you...

Describe how you think contracting fits into the acquisition program. Feel free to use some of your own experiences and examples

Find intermediate calculations to 3 decimal places, travel on Mountain Airl...

travel on Mountain Airlines for the past 18 weeks was: Week Passengers Week Passengers 1 402 10 440 2 410 11 446 3 420 12 451 4 415 13 455 5 412 14 462 6 414 15 466 7 424 16 474 8

Write Your Message!

Captcha
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!

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