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January 25, 2020 at 8:49 am
Good day Sir, In exam ,we have to calculate effective interest rate or no need to calculate. Waiting for your reply.
John Moffat says
January 25, 2020 at 9:59 am
It depends what the question asks for 🙂
November 26, 2019 at 4:54 pm
Good day Mr. John,
On FRA, so it means that if the interest rate drops at the start of the loan, the company loses and still pays the FRA as in this example 1, 10% instead of 8%?
October 16, 2018 at 4:12 pm
Hi can i ask, is there a reason when calculating effective rate for the loan when actual interest was 8% we did not included the premium
October 16, 2018 at 4:26 pm
I assume you are referring to the IRG example (because there is no premium payable for FRA’s).
If you check the lecture again, you will see that I have included the premium when calculating the effective rate (because the premium is payable whether or not the IRG is used).
October 17, 2018 at 4:24 pm
Thank you, noted
October 18, 2018 at 8:46 am
You are welcome 🙂
August 21, 2018 at 2:45 pm
Assuming today is 1st of December, 2017 and Company x agree to borrow in order to offer financial support to a gardening event. the event will take place in seven months time but an expenditure of £23m for temporary facilities will be necessary in five months time.
Q: what would you say is the duration of the loan in terms of F.R.A is?
August 21, 2018 at 4:34 pm
Please ask questions like this in the Ask the Tutor Forum, and not as a comment on a lecture.
On what you have typed, it would be 5-7 FRA. (Although this is hardly an AFM problem, more of a basic FM problem)
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