Suppose the Quote for a Five-Year Swap with Semiannual Payments

question 31

Multiple Choice

Suppose the quote for a five-year swap with semiannual payments is 8.50-8.60 percent.This means

• A)the swap bank will pay semiannual fixed-rate dollar payments of 8.60 percent against receiving six-month dollar LIBOR.
• B)the swap bank will receive semiannual fixed-rate dollar payments of 8.50 percent against paying six-month dollar LIBOR.
• C)if the swap bank is successful in getting counterparties to both legs of the swap at these prices, he will have an annual profit of ten basis points.
• D)none of the above

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Definitions:

Focus

The concentration of attention and resources on specific project objectives or activities to ensure successful completion.

Conflict Resolution

The process of addressing and resolving disagreements between parties in a constructive and effective manner.

Project Story

A narrative or account that describes the journey of a project from its inception to completion, highlighting challenges, successes, and key milestones.

Cultural Differences

The variations in beliefs, behaviors, and norms observed among various groups, highly relevant in global interactions.