Q.1. Companies A and B have been offered the following rates per annum on a $20 million five-year loan : Fixed rate Floating rate Company A 12.0% LIBOR + 0.1% Company B 13.4% LIBOR + 0.6% Company A requires a floating-rate loan; company B requires a fixed-rate loan. Design a swap that will net a bank‚ acting as intermediary‚ 0.1 % per annum and that will appear equally attractive to both companies. Q.2. Company X wishes to borrow U.S. dollars at a fixed rate of interest. Company
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Interest Rate Forecasting using Regression Analysis Introduction Forecast of interest rates can be done in many different ways‚ qualitative (surveys‚ opinion polls) as well as quantitative (reduced form and structural approaches)* Example of methods in quantitative approaches - Regression method - Univariate method (e.g. ARIMA) - Vector autogressive models (VAR) - Single equation approaches - Structural systems of simultaneous equations This paper will focus on the structural
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Glossary: 1) Interest rates: An interest rate is the rate at which interest is paid by borrowers to use the money they borrow from a lender. The annualized cost of credit or debt calculated as the percentage ratio of interest to the client. Each bank can determine its own interest rate on loans‚ but in practice local rates are about the same from bank to bank. In general‚ interest rates rise in periods of inflation‚ higher demand for credit‚ narrow money‚ or because of higher reserve requirements
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Problem 1. Villarente Company issued 5-year $200‚000 face value bonds at 95 on January 1‚ 2012. The stated interest rate on these bonds is 9%‚ and the effective interest rate is 10.33%. Use the effective interest rate method to complete the amortization schedule below. Cash Payment Interest Expense Discount Amortization Carrying Value January 1‚ 2012 December 31‚ 2012 18‚000 19‚627 1627 191‚627 December 31‚ 2013 18‚000 19‚795.07 1796.07 193‚422.07 December 31‚ 2014 18‚000 19
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Once Upon a Time by Gabriel OkaraOnce upon a time‚ son‚they used to laugh with their heartsand laugh with their eyes:but now they only laugh with their teeth‚while their ice-block-cold eyessearch behind my shadow.There was a time indeedthey used to shake hands with their hearts:but that’s gone‚ son.Now they shake hands without heartswhile their left hands searchmy empty pockets.‘Feel at home!’ ‘Come again’:they say‚ and when I comeagain and feelat home‚ once‚ twice‚there will be no thrice-for then
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M.Sc. Economics and Finance Dissertation INTEREST RATE SENSITIVITY OF STOCK RETURNS Acknowledgements I would like to thank my supervisor Dr. Illias Tsiakas for his continued support and Encouragement. I would like to thank my father‚ mother and my sister for their tremendous support and understanding not only through the period of this thesis but for the period of the entire masters programme. In addition I would like to thank some of my friends who supported and encouraged me. Special thanks
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Global Financing and Exchange Rate Mechanisms: Counter trade Counter trade is a creative sticky sales project that might not otherwise happen due to currency barriers. Counter trade is an umbrella term for a variety of unconventional reciprocal trading arrangements. It often occurs between developed and developing nations‚ but it also occurs between one developing nation and another( Nelson‚ 1999). It is the trade between two countries in which goods are traded for other goods rather than for
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Background……………………………………………………………………2 1.2 Definition of interest rates……………………………………………………..2 2.0 How does an increase interest rate affect the economy in the UK? 3.1 Encourage people saving money and reduce borrowing……………2-3 3.2 Decrease firms to investment……………………………………………..3 3.3 Promoting the exchange rate‚ and makes exports less………………...3 3.4 Reduce the aggregate demand and inflation rate………………………4 3.5 The price and cost will fall………………………………………………
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contributor in Nigerian foreign exchange earnings‚ experienced a declining trend after economic reforms programmes (SAP). One of the most important ingredients of reforms programmes which have generated a lot of inconclusive controversies is the movement to flexible exchange rate which first occurred in the developed countries in 1973‚ and much later in the developing countries. The controversy especially for the developing countries is whether flexible exchange rate is actually as beneficial as mostly
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Lecture No. 1 Chemical Kinetics 1.1 The Rate of a Reaction Chemical Kinetics is the area of Chemistry that is concerned with the speed‚ rate or mechanism at which a chemical reaction occurs. Reaction Rate is the change in the concentration of a reactant or product with time (i.e. M/s). It measures how fast a reactant is consumed and how fast a product is formed. 1.2 WRITING RATE EXPRESSIONS Consider the following hypothetical reaction. A + 2B ( 3C + D Rate = - rate of consumption
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