1. Plain vanilla interest rate swap, A British Company, A enters into an interest rate swap with...

Question:

1. Plain vanilla interest rate swap, A British Company, A enters into an interest rate swap with a The notional principle of the swap is £40 million. Payments will be made on the basis of 90/360 (90 days in the settlement period and 360 days per year). The company will receive a fixed rate of 5% and pay Euribor. The current Euribor is 4.5%. Determine which party pays which and what amount in the upcoming payment.
2. Currency swap, Dell Corp. enters into a currency swap with a in which it pays a fixed rate in euros, and the pays a fixed rate in U.S. dollars. The notional principals are $385 million and €350 million (equivalent in value at the current of $1.1 per euro.) The fixed rates are 4.8% in dollars and 5.2% in euros. The swap specifies that the two parties exchange the notional principal at the start and at the end of the swap. Payments are made semiannually on the basis of 180/360.
A. Determine the initial exchange of cash that occurs at the start of the swap.
B. Determine the semiannual payments
C. Determine the final exchange of cash that occurs at the end of the swap. Solve both of those problems and include the solutions for both!!! Show your work!!
Dealer
A dealer in the securities market is an individual or firm who stands ready and willing to buy a security for its own account (at its bid price) or sell from its own account (at its ask price). A dealer seeks to profit from the spread between the... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...