An Equity Swap with Fixed Interest Payments Has Two Payments

question 42

Multiple Choice

An equity swap with fixed interest payments has two payments remaining.The first occurs in 30 days and the second occurs in 210 days.The discount factors are 0.9934 (30 days) and 0.9528 (210 days) .The upcoming fixed payment is at 4 percent and is based 180 days in a 360-day year.The equity index was at 1150 at the beginning of the period and is now at 1152.75.The notional amount is $60 million.Find the approximate value of the equity swap from the perspective of the party making the equity payment and receiving the fixed payment.

• A)$143,478
• B)$642,000
• C)-$143,478
• D)-$642,000
• E)-$496,560

Grasp the relationship between the coefficient of determination and the coefficient of correlation.

Learn how to calculate and interpret the mean square error (MSE) and its importance in regression analysis.

Understand the distinctions between various interval estimates in the context of regression analysis.

Acquire knowledge on the assumptions and characteristics of regression analysis, including the role of the error term.

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Definitions:

Retested

The act of administering a test or evaluation again to the same subjects under the same conditions to verify the results.

Period

A length or portion of time in history or a person's life, often defined by specific characteristics or events.

Moral Intuitions

Spontaneous, often unconscious, judgments about right and wrong.

Cross-sectional

A type of research design that examines data from a population, or a representative subset, at a specific point in time.