It Is March 15,and the Next Payment Date in an Equity

question 16

Multiple Choice

It is March 15,and the next payment date in an equity swap is September 15.You contract through an equity swap ($100,000 notional) to receive Libor and pay the equity return.Libor payments use the money market convention,i.e. ,ACT/360.Suppose the equity index goes from 1011 to 1088 over this period.The six-month Libor on March 15 is 3%.What is your net cashflow on September 15?

• A) \(+ 1,533.33\)
• B) \(- 7,616.22\)
• C) \(- 6,082.89\)
• D) \(+ 3,113.33\)

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Definitions:

Priming Effects

The influence that a prior stimulus has on the response to a later stimulus, often facilitating or altering the response.

Implicit Memory

Memory that enables task performance improvement by utilizing prior experiences, all without the conscious recall of these experiences.

Word Completion

A psychological task where participants are asked to complete words from partially presented stimuli, often used to assess memory or cognitive processing.

Working Memory

A cognitive system that holds and manipulates information in short-term memory for tasks such as reasoning and comprehension.