41. Find the fixed rate on a plain vanilla interest rate swap with payments ever

Question

41. Find the fixed rate on a plain vanilla interest rate swap with payments every 180 days (assume a 360-day year) for one year. The prices of Eurodollar zero coupon bonds are 0.9756 (180 days) and 0.9434 (360 days). (Points : 1)        5.9 percent
       5 percent
       6 percent
       5.5 percent
       2.95 percent

Question 42. 42. Use the information in problem 40 to find the fixed rate on an equity swap in which the stock index is at 2,000. (Points : 1)        2.95 percent
       5 percent
       6 percent
       5.9 percent
       3.5 percent

Explanation / Answer

Ans 44   the maturity is constant

Ans 45    borrow the notional principal and pay off the counterparty

Ans 48  none of the above

Ans 49   the notional principal reduces throughout the life of the swap

As per chegg policy only 4 MCQ's can be answered at a time.

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