You Enter into a Two-Year Variable Notional Swap of Equity

question 9

Multiple Choice

You enter into a two-year variable notional swap of equity returns for 6-month Libor with semi-annual payments on both legs. The initial swap notional is $100 million, the Libor rate at inception of the swap is 7.2%, and the realized raw equity returns during the first 6-month period is 6.3%. The first 6-month period has 183 days. The notional principal of the swap entering the second 6-month period is

• A) $103.15 million.
• B) $103.20 million.
• C) $103.66 million.
• D) $106.3 million.

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Definitions:

Transformational Leadership Model

A leadership approach that causes change in individuals and social systems by inspiring followers to achieve extraordinary outcomes.

Contingent Reward-Based Practices

Management strategies that offer rewards or incentives based on the achievement of specific criteria or performance goals.

Authoritarian Leaders

Leadership style characterized by individual control over all decisions with little input from group members, often involving strict rules and regulations.

Assertive Risk Takers

Individuals who confidently engage in actions that involve risk, often with the belief that they can positively influence the outcome.