--%>
Assignment Help - homework help

$-£ currency swap

Assume Morgan Guaranty, Ltd. is quoting swap rates as follows: 7.75 - 8.10 percent annually against six-month dollar LIBOR for dollars and 11.25 - 11.65 percent annually against six-month dollar LIBOR for British pound sterling. At what rates will Morgan Guaranty enter in a $/£ currency swap?
Morgan Guaranty will pay yearly fixed-rate dollar payments of 7.75 percent against attaining six-month dollar LIBOR flat, or this will attain fixed-rate annual dollar payments at 8.10 percent against paying six-month dollar LIBOR flat. Morgan Guaranty will make annual fixed-rate £ payments at 11.25 percent against gaining six-month dollar LIBOR flat, or it will attain annual fixed-rate £ payments at 11.65 percent against paying six-month dollar LIBOR flat. Therefore, Morgan Guaranty will enter into currency swap wherein it would pay annual fixed-rate dollar payments of 7.75 percent in return for attaining semi-annual fixed-rate £ payments at 11.65 percent, or this will receive annual fixed-rate dollar payments at 8.10 percent against paying annual fixed-rate £ payments at 11.25 percent.

   Related Questions in Financial Management

  • Q : Tax considerations effect on the cost

    Explain the tax considerations effect on the cost of equity and the cost of debt?

    		•
  • Q : International finance factor

    factor responsible for surging the international investment portfolio

    		•
  • Q : Explain numerical integration in

    Explain numerical integration in numerical method.

    		•
  • Q : What are Uses of Wiener

    What are Uses of Wiener Process/Brownian Motion in Finance? Answer: This is the most common stochastic building block for random walks within finance.<

    		•
  • Q : Explain the commonsense criteria that

    Explain the commonsense criteria that of a measure of risk.

    		•
  • Q : Expected return and standard deviation

    We attain the following data in dollar terms: The correlation

    		•
  • Q : HW Otobai Motor Company is currently

    Otobai Motor Company is currently paying a dividend of $1.40 per year. The dividends are expected to grow at a rate of 18% for the next three years and then a constant rate of 5% thereafter forever. What is the vlaue of its current stock price? Assuming that the discount rate is 10%.{Hint: pages 84-

    		•
  • Q : European Sovereign-Debt Crisis Describe

    Describe the present economic crisis situation in Europe.

    		•
  • Q : Define International Finance

    International Finance: It is the branch of economics which studies the dynamics of exchange rates, foreign investment, and how such affect international trade. International finance activities aid organizations emp

    		•
  • Q : Question on interest pay through

    Grecian Tile Manufacturing of Athens, Georgia borrows $1,500,000 at LIBOR and a lending margin of 1.25 percent per annum on six-month rollover basis through London bank.  If six-month LIBOR is 4 ½ percent in the first six-month interval and 5 3/8 percent over the second six-mo

    		•