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"3. Company X wants to borrow $10,000,000 floating...

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"3. Company X wants to borrow $10,000,000 floating for 5 years; company Y wants to borrow $10,000,000 fixed for 5 years. Their external borrowing opportunities are shown below: A swap bank proposes the following interest only swap:??X will pay the swap bank annual payments on $10,000,000 with the coupon rate of LIBOR - 0.15%; in exchange the swap bank will pay to company X interest payments on $10,000,000 at a fixed rate of 9.90%. Y will pay the swap bank interest payments on $10,000,000 at a fixed rate of 10.30% and the swap bank will pay Y annual payments on $10,000,000 with the coupon rate of LIBOR - 0.15%. What is the value of this swap to the swap bank? ?? A. The swap bank will lose 40 basis points per year on $10,000,000 = $40,000 per year.? B. The swap bank will earn 40 basis points per year on $10,000,000 = $40,000 per year.? C. The swap bank will break even.? D. None of the above 4. Company X wants to borrow $10,000,000 floating for 5 years; company Y wants to borrow $10,000,000 fixed for 5 years. Their external borrowing opportunities are shown below: A swap bank is involved and quotes the following rates five-year dollar interest rate swaps at 10.05%-10.45% against LIBOR flat. Assume both X and Y agree to the swap bank's terms. Fill in the values for A, B, C, D, E, & F on the diagram.? A. = LIBOR; B = 10.45%; C = 10.05%; D = LIBOR; E = LIBOR; F = 12%?B. A = 10%; B. = 10.45%; C = 10.05%; D = LIBOR; E = LIBOR; F = LIBOR + 1?%? C. A = 10%; B = 10.45%; C = LIBOR; D = LIBOR; E = 10.05%; F = LIBOR + 1?%? D. A = 10%; B = LIBOR; C = LIBOR; D = 10.45%; E = 10.05%; F = LIBOR + 1?%? I need for you to include the calculus neede to answer each question please, thank you,Rachel, PLEASE!!! I really need this by tonight!! I know it?s not alot of time but PLEASE!!! Thank you!!,Fixed Rate Borrowing cost: Company X: 10% Company y: 12% Floating rate borrowing cost: Company x:LIBOR Company Y:LIBOR +1.5% THANKS!!,I cant seem to paste the diagram!! I will attach the document,I appreciate it alot!,My friend with username: gaby.sfara lost contact with you. I believe she asked for the calculus for questions 1 and 2 of the same document. Is there any chance you could send them on this same work or is there a way she can get in contaqct with you again? Thanks,Thank you very much, Do you know anything on the calculus for questions 1 and 2?? My friend sent you that question but I think she only got the answer by itself. She is username: gaby.sfara

 

Paper#5522 | Written in 18-Jul-2015

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