Find the Net Payment on an Equity Swap in Which

question 48

Multiple Choice

Find the net payment on an equity swap in which party A pays the return on a stock index and party B pays a fixed rate of 6 percent.The notional amount is $10 million.The stock index starts off at 1,000 and is at 1,055.15 at the end of the period.The interest payment is calculated based on 180 days in the period and 360 days in the year.

• A)party B pays $851,500
• B)parry B pays $48,500
• C)party B pays $251,500
• D)party A pays $251,500
• E)party A pays $851,500

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Definitions:

Ediacaran Radiation

A period marked by the rapid increase in multicellular life forms on Earth, occurring towards the end of the Ediacaran Period.

Cephalic End

The cephalic end refers to the head end of an organism or embryo, where sensory organs and the brain are often located, opposite the caudal or tail end.

Endoderm

The innermost of the three primary germ layers in the embryo, giving rise to the lining of the digestive and respiratory systems.

Digestive Tube

A continuous hollow tube extending from the mouth to the anus, through which food is processed and nutrients absorbed.