Consider the buyer of a FRA 6-9. The contract rate is 6.35% on a notional amount of $10 million. Calculate the settlement amount of the seller if the settlement rate is 6.85%. Assume a 30/360 day count basis.
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Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
3. Consider the buyer of a FRA 6-9. The contract rate is 6.35% on a notional amount of $10 million. Calculate the settlement amount of the seller if the settlement rate is 6.85%. Assume a 30/360 day count basis.
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- Suppose that a party wanted to enter an FRA that expires in 121 days and is based on 55-day LIBOR. The dealer quotes a rate of 0.049 on the FRA. Assume that at expiration, the 55-day LIBOR is 0.029, and the notional amount is USD10,000,000. What is the payoff of the FRA short position?Suppose a party wanted to enter into an FRA that expires in 42 days and is based on 137-day LIBOR. The dealer quotes a 4.75 percent rate on this FRA. Assume that at expiration the 137-day LIBOR is 4 percent and the notional principal is $ 20,000,000. Calculate the FRA payout for a long position.A Firm buys an FRA on 90-day LIBOR expiring in 30 days with Notional principal of $20 million. The contract rate is 10%. If at expiration, LIBOR is 8%, how much will the long has to pay to the short i.e., seller of FRA. What happens if at expiration, LIBOR is 12%?
- Suppose you take a 3/1 interest - only, 30-year ARM for $140,000.00 with an interest - only contract rate of 5% and a following rate of 7% in year 4. Assume you pay 1 discount points. Suppose that the contract rate in year 5 is 7.25% and this contract rate stays constant from years 5 through 30. What is the APR?On 1st of December 2020, Mohamed entered in a Forward rate agreement 2*4 FRA with a fixed rate of 6.00% and a notional amount of $2,000,000. What will be the value of this contract on 11th of December, if the LIBOR-110 days is 6.15% & LIBOR - 50 days is 5.85%? * $-770 $-400 $740Show work and discuss result after Finding the approximate market value of a long position in an FRA at a fixed rate of 5 percent in which the contract expires in 20 days, the underlying is 180-day LIBOR, the notional principal is $25 million, the 20-day rate is 7 percent, and the 200-day rate is 8.5 percent
- What is the equivalent annual cost in years 1 through 11 of a contract that has a first cost of $79,000 in year 0 and annual costs of $18,000 in years 3 through 11? Use an interest rate of 11% per year. The equivalent annual cost is determined to be $When deciding on a contract based on present value and a discount rate of 10%, what other factors must be considered? Contract 1 $900,000 signing bonus $850,000 at the end of each year for the next 5 years Contract 2 $200,000 immediate signing bonus $100,000 at the end of each year for the next five years $150,000 a year at the end of years 5 through 10 $1,000,000 a year at the end of years 11 through 40 Contract 3 $1,000,000 immediate signing bonus $500,000 at the end of year 1 $1,000,000 at the end of year 2 $1,500,000 at the end of year 3 $2,500,000 at the end of year 4 As part of the third offer he was also promised a $200,000 bonus for any year in which he was selected to play in the Pro Bowl All Star game. his agent figured there was a 25% probability of that occuring in each of the next 4 years.Consider a FRA where IBM agrees to borrow $100 mil. from a dealer for 6 months starting in 4 years. The contractual FRA rate is 5.5% per annum. Assume that in 4 years the actual 6-month LIBOR is 7.5% per annum. The FRA is settled when ________ pays _______ the amount of _________. IBM; dealer; $1,000,000 dealer; IBM; $1,000,000 IBM; dealer; $963,855 dealer; IBM; $963,855 dealer; IBM; $36,145
- The payments required on a contractual obligation are $800 per month. The contract was purchased for $9,250 just before a regular payment date. The purchaser determined this price based on a required rate of return of 4.3% compounded monthly. How many payments will be required, include the partial final payment? 12 payments 24 payments 9 payments 6 payments 18 paymentsYou entered into a long 3 × 6 forward rate agreement on a notional amount of $10,000,000 at an agreement rate of 3 percent. Suppose at the settlement date of the FRA, the settlement rate is 3.5 percent. What is the cash settlement of the FRA? Net payment of $12,391.57 to you Net payment of $12,500 to you Net payment of $50,000 to you Net payment of $48,309.18 to youA contract requires end-of-month payments of $240 for another 9 1/4 years. What would an investor pay to purchase this contract if she requires a rate of return of 4.5% compounded monthly? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Investor would pay $