Arts, 03.06.2021 18:00 briannabo08
2. Another alternative that you are considering it to go for options. You anticipate that the interest rate will fluctuate between 5.5 percent and 7.5 percent over the next two years. You have estimated your expenses and they are manageable if the interest rate remains within this range. The following options are available to you:
Option Cap Cap Floor Floor
Strike Rate 8.5 percent 7.5 percent 5.5 percent 4.5 percent
Notional principal PKR 25 million PKR 25 million PKR 25 million PKR 25 million
Period 2 years 2 years 2 years 2 years
Premium Payable 2.68% 1.52% 2.35% 1.23%
a. Formulate a collar strategy. Support your answer with diagram (1 mark)
b. Calculate the net borrowing cost if the KIBOR turns out to be 8.58%, 6% and 3.25%
c. Discuss which of the alternative (option or FRA) is better for the treasurer. Justify your choice.
Answers: 3
Arts, 23.06.2019 14:30
16. apply. select something from your home that is used solely for aesthetic purposes. critique it using the four steps of art criticism. when you are finished, ask yourself if the object seems different than it did before. has your opinion of the object changed? 17. analyze. find a movie critic’s review of a current film in a newspaper or magazine. read it carefully. try to find statements that fit each of the four steps of art criticism. answer one either one 16 or 17
Answers: 3
2. Another alternative that you are considering it to go for options. You anticipate that the intere...
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