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:

Line Study

An investigation or experiment that focuses on the perception, judgment, or memory of lines, often in the context of psychological research.

Conforms

Adjusts one's behavior or thinking to match with a group standard or expectation.

Behaviour

Actions, reactions, or conduct of an organism, usually in response to external or internal stimuli.

Conformity

The act of matching attitudes, beliefs, and behaviors to what is considered normal or acceptable in a specific social context.