Exhibit 14-10
USE THE FOLLOWING INFORMATION FOR THE NEXT QUESTION(S)
The WallMal Company has entered into a 4-year interest rate swap, with semiannual settlement, to pay a fixed rate of 8% per year and receive 6-month LIBOR. The notional principal is $50,000,000.
-Refer to Exhibit 14-10. Indicate the market value of the swap to the WallMal Company.
A) $3,525,120
B) -$3,500,000
C) $1,332,150
D) -$1,332,150
E) $1,026,600

Question

Quizplus · Accepted Answer

The company pays the dealer = (102.6643 - 100)(50,000,000) = $1,332,150

Exhibit 14-10 USE THE FOLLOWING INFORMATION FOR THE NEXT QUESTION(S)