Consider an Equity Swap of the Equity Index Return Versus

question 17

Multiple Choice

Consider an equity swap of the equity index return versus six-month Libor. The current equity index is at 1100. The six-month Libor rate is currently 11.50%. There are 184 days in the given six month period. What should be the level of the index in 6 months for the net payment in six months to be zero?

• A) 1100.
• B) 1165
• C) 1227
• D) 1422

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Definitions:

Autocrine

a mode of hormone action where a hormone acts on the same cell that produced it.

Hypothyroidism

A condition where the thyroid gland is underactive, resulting in a deficiency in thyroid hormones affecting metabolism.

Females

The sex that is typically associated with the production of ova (eggs) and characteristics attributed to women or female animals in biology.

Pineal Gland

A small endocrine gland in the brain that produces melatonin, a hormone that modulates sleep patterns.