You Are Paying 5% Per Annum Paid Semi-Annually and Receiving

question 194

Multiple Choice

You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10,000,000.00 interest rate swap with exactly two years to maturity. 6-month LIBOR for the next payment date is fixed today at 4.95%. You expect 6-month LIBOR in 6 months to fix at 5.25%, in 12 months at 5.35% and in 18 months at 5.40%. What do you expect the net settlement amounts to be over the next 2 years? Assume 30-day months.

• A) Pay 250.00, receive 1,250.00, receive 1,750.00, receive 2,000.00
• B) Receive 250.00, pay 1,250.00, pay 1,750.00, pay 2,000.00
• C) Pay 2,500.00, receive 12,500.00, receive 17,500.00, receive 20,000.00
• D) Receive 2,500.00, pay 12,500.00, pay 17,500.00, pay 20,000.00

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Definitions:

Behavioral Approach

A perspective in leadership and psychology that emphasizes observable actions and responses, rather than internal mental states.

High-High Style

A leadership approach that is high in both task orientation and relationship orientation, balancing work requirements with support for team members.

Performance Outcomes

The results or outputs achieved from a certain activity or process, often measured against preset standards or objectives.

Behavioral Approach

A method of studying leadership or other psychological phenomena by observing and analyzing observable behaviors rather than internal processes.