XYZ Corporation Enters into a 6-Year Interest Rate Swap with a Swap

question 6

Multiple Choice

XYZ Corporation enters into a 6-year interest rate swap with a swap bank in which it agrees to pay the swap bank a fixed-rate of 9 percent annually on a notional amount of SF10,000,000 and receive LIBOR - ½ percent.As of the third reset date (i.e.mid-way through the 6 year agreement) ,calculate the price of the swap,assuming that the fixed-rate at which XYZ can borrow has increased to 10%.(Round your final answer to nearest SF and Do not round intermediate calculations)

• A) SF248,685
• B) SF900,000
• C) SF2,700,000
• D) SF7,300,000

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Definitions:

National Mood

National mood refers to the general emotional tone or attitude of a country's population, often influenced by current events, economic conditions, or national experiences.

Pessimistic

Having a negative outlook on the future or a situation, expecting the worst possible outcome.

Optimism

A mental attitude characterized by hope and confidence in success and a positive future.

Lyndon Baines Johnson

The 36th President of the United States, serving from 1963 to 1969, known for his domestic policies on civil rights, poverty, and healthcare.