The price of one-year zero coupon bond is 92.593. The price of a two-year bond with a coupon rate of 7.0 percent is 101.711. Both bonds have a par value of 100 dollars. What is the two-year spot rate (in percent)?
Consider the following basic $100 million CDO structure. The…
Consider the following basic $100 million CDO structure. The senior tranche has a par value of $70 million dollars and a coupon rate of LIBOR + 1.0%. The mezzanine tranche has a par value of $20 million and a coupon rate equal to 8.25%. The equity tranche has a par value of $10 million. Fees are equal to 5.2% of the equity tranche’s par value. The collateral consists of bonds with a coupon 9.75% that mature in ten years. A ten-year interest rate swap with notional principal of $70 million dollars is available that receives fixed rate of 5.25% and pays the LIBOR. Design a CDO that satisfies the above requirements. What is the potential annual return (in percent) to the equity tranche assuming no defaults?
An interest rate swap was issued one year ago. If in one ye…
An interest rate swap was issued one year ago. If in one year the term structure of interest rates (used to value an interest rate swap) shifts down, the value of the interest rate swap to a party that pays fixed and receives floating:
A company can invest funds for five years at LIBOR minus 50…
A company can invest funds for five years at LIBOR minus 50 basis points. The five-year swap rate is 4%. What fixed rate of interest can the company earn by using the swap?
According to “The Rise of the Worker Productivity Score” wha…
According to “The Rise of the Worker Productivity Score” what new types of jobs are recently newly subjected to digital productivity monitoring?
Reducing the amount of skill needed for a job is know as
Reducing the amount of skill needed for a job is know as
According to Daron Acemoglu’s research in our required readi…
According to Daron Acemoglu’s research in our required readings, which industry is most impacted by robotic use?
Solve for x (Round to two decimal places if necessary): 6x+5…
Solve for x (Round to two decimal places if necessary): 6x+55=x2{“version”:”1.1″,”math”:”6x+55=x2″} _______ _______
This plot shows the vertical position of the center of mass…
This plot shows the vertical position of the center of mass during the walking gait cycle. At time point 5, what is the sign of velocity?
During the down phase of a push up exercise (lowering to the…
During the down phase of a push up exercise (lowering to the ground in a slow controlled movement) the down phase will have move force in the pectoralis major chest muscle as compared to the up phase of the movement.