swaps practice
DESCRIPTION
it will help to practice swaps sumsTRANSCRIPT
SWAPS1. M/S jayanti and Co. enters into a currency swaps agreement with M/S Dharmika & Co. M/S jayanti and Co. will pay $ and receive (at the time of initiation of contract). Term of swap if 1 year. Exchange rate at initiation of contract is 1$=40 and at end of contract is 1$=45. Find principal amount that will be exchanged between 2 parties at initiation and end of the contract. Notional amount of contract is $1, 00,000. 2. M/s. Bhoomi and Co. enters into a currency swaps agreement with M/s. jeel and Co. M/s. Bhoomi and Co.will pay and receive (at the time of initiation of contract). Term of swap if 1 year. Exchange rate at initiation of contract is 1$=42 and at end of contract is 1$=47. Find principal amount that will be exchanged between 2 parties at initiation and end of the contract. Notional amount of contract is $2, 00,000. 3. Consider 2 Firm A &B. Both have to borrow 1,00,000.FirmFixed Rate (%)Floating Rate (%)
A10MIBOR+8
B12MIBOR+11
Firm A wants to borrow in fixed Rate. Firm B wants to borrow in floating rate. Explain how a swap deal can benefit them.4. Consider 2 Firm X &Y. Both have to borrow 5,00,000.FirmFixed Rate (%)Floating Rate (%)
X12MIBOR+10
Y14MIBOR+13
Firm X wants to borrow in fixed Rate. Firm Y wants to borrow in floating rate. Explain how a swap deal can benefit them.5. Consider 2 Firm A &B. Firm have to borrow $2000. Firm B have to borrow 1,00,000. Additionally 1$=50.Firm$ (%) (%)
A108
B912
Explain how a swap deal can benefit them.6. Consider 2 Firm X&Y. Firm X have to borrow $10000. Firm Y have to borrow 5,00,000. Additionally 1$=50.Firm$ (%) (%)
X129
Y1011
Explain how a swap deal can benefit them.