- This topic has 7 replies, 3 voices, and was last updated 9 years ago by
.
-
Posts
-
Good day sir
I am having little difficulty with understanding who receive and pay what in an interest rate swap with reference to the article on Acca website currency swap.
In you lecture i understand but in the article not sure how the got barrow receives 2.9% and what he pays etc
If Barrow did their own floating rate borrowing, then they would pay E + 1.5%.
Since there is a saving through swapping of 0.8% each (before the bank fee), they must end up paying E + 0.7% (before the bank fee).
In order to do the swap they borrow fixed at 3.6%, they pay E to Greening (so they are now paying in total E + 3.6%) and so to end up paying E + 0.7% they must receive from Greening 3.6 – 0.7 = 2.9%
- Topics: 0
- Replies: 171
- ☆☆
Hi
@johnmoffat said:
You are welcome 🙂Hello sir, I wrote the P4 exam yesterday and wanted to know if ACCA will penalise me. I had started the hedging question stuck; I later realised that the NPV was more straightforward so I started answering that but couldn’t finish as time was far spent? I did not cancel any of them as I’ve been told not to cancel answers. Will they penalise me by picking the worst two? I’m really worried here. Thank you
- Topics: 0
- Replies: 171
- ☆☆
@johnmoffat said:
Don’t worry. They will realise what has happened.Thank you sir
- You must be logged in to reply to this topic.