Bull and Finch Company wants a fixed for floating swap It expects interest rates to rise far above the fixed rate that it would pay and remain very high until the swap maturity date Should it consider negotiating for a rate capped swap with the cap set at two percentage points above the fixed rate ...

Bull and Finch should not consider the ratecapped sw ...

Bull and Finch Company wants a fixed-for-floating swap. It expects interest rates to rise far above the

Question:

Bull and Finch Company wants a fixed-for-floating swap. It expects interest rates to rise far above the fixed rate that it would pay and remain very high until the swap date. Should it consider negotiating for a rate-capped swap with the cap set at two percentage points above the fixed rate? Explain.
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...