Use the Zero-Coupon Bond Prices Given in the Following Table

question 9

Multiple Choice

Use the zero-coupon bond prices given in the following table to answer the questions that follow.
-Consider a three-year swap receiving floating paying fixed with principal of $10 million,paying a fixed rate of 2 percent per year paid yearly,and receiving the one-year floating spot rate yearly.How would one synthetically construct the swaps payoff at time 3 using FRAs and zero-coupon bonds? (Hint: use the answer to question 11. )

• A) long a $10 million notional FRA maturing at time 3 and long 22,222 zero-coupon bonds maturity at time 3
• B) long a $10 million notional FRA maturing at time 3 and long 20,000 zero-coupon bonds maturity at time 3
• C) short a $10 million notional FRA maturing at time 3 and short 22,222 zero-coupon bonds maturity at time 3
• D) short a $10 million notional FRA maturing at time 3 and short 20,000 zero-coupon bonds maturity at time 3
• E) long a $10 million notional FRA maturing at time 3 and short 22,222 zero-coupon bonds maturity at time 3

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Definitions:

Constructivist Therapies

Forms of therapy based on the principle that an individual's reality is constructed by their own perceptions and experiences, focusing on exploring and changing these constructs.

Case Study Methods

A research strategy that involves an in-depth, detailed investigation of a subject or a small group, often used in psychology, sociology, and anthropology.

Solution-focused Therapy

A short-term goal-focused therapeutic approach that emphasizes the development and execution of solutions to problems rather than focusing on the problems themselves.

Comparative Effectiveness

Research that compares the outcomes of different treatments or interventions to assess which are most effective for specific conditions or populations.