Find the upcoming payment interest payments in a currency swap in which party A pays U.S.dollars at a fixed rate of 5 percent on notional amount of $50 million and party B pays Swiss francs at a fixed rate of 4 percent on notional amount of SF35 million.Payments are annual under the assumption of 360 days in a year,and there is no netting.
A)party A pays $2,500,000,and party B pays SF1,400,000
B)party A pays SF1,400,000,and party B pays $2,500,000
C)party A pays SF1,750,000,and party B pays SF1,400,000
D)party A pays $2,500,000,and party B pays $2,000,000
E)party A pays $50 million,and party B pays SF35 million

Question

Quizplus · Accepted Answer

- Party A pays U.S. dollars at a fixed rate of 5% on notional amount of $50 million annually, which equals to $2,500,000.
- Party B pays Swiss francs at a fixed rate of 4% on notional amount of SF35 million annually, which equals to SF1,400,000.
Therefore, the correct answer is A, as it shows the correct payment amounts for both parties.

Find the Upcoming Payment Interest Payments in a Currency Swap