Exhibit 14-12 USE THE FOLLOWING INFORMATION FOR THE NEXT QUESTION(S)

question 78

Multiple Choice

Exhibit 14-12
USE THE FOLLOWING INFORMATION FOR THE NEXT QUESTION(S)
The Skalmory Corporation has entered into a 3-year interest rate swap, with semiannual settlement, to pay a fixed rate of 7.5% per year and receive 6-month LIBOR. The notional principal is $10,000,000.
-Refer to Exhibit 14-12. Assume that one year later the fixed rate on a new 2-year receive fixed pay floating LIBOR swap has fallen to 7% per year. Settlement is on a semiannual basis. Calculate the market value of the FRN based on $100 face value.

• A) $101.33
• B) $100.58
• C) $100.00
• D) $98.67
• E) $95.83

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A type of research method that involves observing two variables to determine whether there is a relationship between them.

Patterns of Behaviour

Regularly occurring sequences or combinations of actions or reactions that are characteristic of an individual or group.

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A scientific approach to research, where variables are manipulated to observe their effect on other variables, in a controlled environment.

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