Exhibit 23.7 Use the Information Below for the Following Problem(S)

question 72

Multiple Choice

Exhibit 23.7
Use the Information Below for the Following Problem(S)
The WallMal Company has entered into a 4-year interest rate swap, with semiannual settlement, to pay a fixed rate of 8% per year and receive 6-month LIBOR. The notional principal is $50,000,000.
-Refer to Exhibit 23.7.Assume that one year later the fixed rate on a new 3-year receive fixed pay floating LIBOR swap has risen to 9% per year.Settlement is on a semiannual basis.Calculate the market value of the FRN based on $100 face value.

• A) $97.42
• B) $100.00
• C) $92.56
• D) $99.63
• E) $75.77

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Definitions:

Temporary Accounts

Accounts that are closed to the owner's equity account at the end of the accounting period.

Closing

The process of finalizing accounts at the end of an accounting period, leading to the preparation of financial statements.

Real Accounts

Accounts that represent assets, liabilities, and equity of a business and carry their balances permanently across accounting periods.

Accounting Period

The time span during which financial activities are recorded and reported, commonly a fiscal year or quarter.