Interest rate swaps can be designated as hedges of underlying borrowings. A swap of floating for fixed

Question:

Interest rate swaps can be designated as hedges of underlying borrowings. A swap of floating for fixed rate is a cash flow hedge, but a swap of fixed for floating is a fair value hedge. Why?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting And Reporting

ISBN: 9780273708704

11th Edition

Authors: Barry Elliott, Jamie Elliott

See More Books

Question Posted: May 31, 2024 11:04 AM

See More Questions

Many groups have treasury policies that use hedging of net positions . solve They would look at their group-wide exposure in, e . solveg . solve foreign currency and then take forward contracts to...
There following excerpts are from the financial statement note on Derivative Instruments and Hedging Activities in Molson Coors Brewing Companys 2009 annual report: Simultaneous with the September...
Family Finance Co. (FFC), a publicly traded commercial bank located in South Carolina, has a December 31 year-end and has adopted the provisions of Accounting Standards Update (ASU) 2016-01,...
The programming language is Java and all of the Classes I was given are in bold. ALIEN CLASS import imagePackage.RasterImage; import java.awt.BasicStroke; import java.awt.Color; import...
The bridge support shown in the figure below is the top half of an ellipse. Assuming that a coordinate system is superimposed on the drawing in such a way that point Q, the center of the ellipse, is...
Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. May 3 Allied made its first and only purchase of inventory for the period on May 3 for...
From the following, information, prepare a Bank Reconciliation Statement as per passbook on 31 December 2005: (a) Bank balance as per cash book 10,000. (b) Cheques issued during December, but...
Holly Hill Acres, Ltd. executed and delivered a promissory note and a purchase money mortgage to Rogers and Blythe. The note provided that it was secured by a mortgage on certain real estate and that...
59. Most small businesses can successfully issue bonds to finance long- term needs
On 1 April year 1, a deep discount bond was issued by DDB AG. It had a face value of 2.5 million covering a five-year term.The lenders were granted a discount of 5%. The coupon rate was 10% on the...
Many groups have treasury policies that use hedging of net positions. They would look at their group-wide exposure in, e.g. foreign currency and then take forward contracts to cover the position....
21.8. Harwood Outboard manufactures outboard motors for relatively inexpensive motor boats. The firm is optimistic about its long-term outlook, but its bond rating is only BB. Describe how you would...
If Technical Specification 2 were reduced in the next design for this product, what would likely happen to customer opinion of Value Feature A? Quick Start QFD Matrix 2 Strong positive correlation...
Customer opinion of Value Feature B is most strongly correlated with what technical specification? Quick Start QFD Matrix 2 Strong positive correlation Some positive correlation == Strong negative...
Consider Quick Start QFD Matrix 1 above. Of the two value features, which do cus- tomers consider three times more important? Quick Start Quick Start QFD Matrix 1 = Strong positive correlation = Some...
Which technical spec can be most easily modified without changing current choices for the other two technical specs? Quick Start Quick Start QFD Matrix 1 = Strong positive correlation = Some positive...
Use Table A.1 to select 20 three-digit random numbers. Did any of the numbers occur more than once? How is it possible for a number to occur more than once? Make a stem-and-leaf plot of the numbers...
The following information is available for Lotus Lake, Inc., as of May 31, 2011: Cash on the books as of May 31 amounted to $43,784.16. Cash on the bank statement for the same date was $53,451.46. ...
What are the before image (BFIM) and after image (AFIM) of a data item? What is the difference between in-place updating and shadowing, with respect to their handling of BFIM and AFIM?
Los datos de la columna C tienen caracteres no imprimibles antes y despus de los datos contenidos en cada celda. En la celda G2, ingrese una frmula para eliminar cualquier carcter no imprimible de la...
Explain impacts of changing FIFO method to weighted average method in inventory cost valuations? Explain impacts of changing Weighted average method to FIFO method in inventory cost valuations?...
A perpetuity makes payments starting five years from today. The first payment is 1000 and each payment thereafter increases by k (in %) (which is less than the effective annual interest rate) per...

Interest rate swaps can be designated as hedges of underlying borrowings. A swap of floating for fixed

Question:

Step by Step Answer:

Financial Accounting And Reporting

Students also viewed these Business questions