Armstrong group (sep/dec 15)

1)-
part(a)

This question is way different than Multidrop (june 10)
when arriving at net off figures i took the column as the “owed to” and row as “owed by” same as like multidrop but in this question my owed to is having the maximum debt of 12.17 after the parent which we will not consider , if i take “owed to” as a column , answer are not consistent under this paper i see.

Owed by
5.99
14.30
6.95
19.78
Owed to
(2.98)
(23.66)
(12.17)
(8.21)
Net 3.01 9.36 (5.22) (11.57)

its just matter of presentation right , if not then the answer of multidrop is not consistent with this armstrong group.

2)-
part(b)

can i do interest rate future for this question along with option and collar

3)-
Interest received 462,500
Loss on exercise
(76 * €25 *50) (95,000)
Premium
(9.1 * €25 *50) 11,375
Net receipt 378,875
Effective interest rates 3.03%

i remember when doing question in lectures it was borrowing but here due to deposit it is otherway round right.
am i right that the premium is net (i.e sell put – buy call) thats why added to interest received and the loss on exercise is due to the strike price of put is lower than future price which is effectively claim back from seller , here it is receipt of 25m in question thats why we are deducting from the interest received , am i making sense??

4)-can i proceed with alternative method without looking for an future price for a collar such as like this method which i have learnt from your lectures

for an increase of 0.5%

max int rate 3.5
less basis (0.4)
increase in 0.5
add premium 0.09
cap is 3.69

mini int rate 3
less basis (0.4)
increase in 0.5
add premium 0.09
floor is 3.19

so the increase in 0.5% gives a collar of 3.19(mini) – 3.69(maxi)
and therefore same working for the decrease in 0.5%