Little Prince (LP) has 100 million Brazilian reals (BRL) of 2- year fixed rate debt with a

Question:

Little Prince (LP) has 100 million Brazilian reals (BRL) of 2-

year fixed rate debt with a bond equivalent yield of 8.25 percent compounded semiannually. LP prefers floating rate BRL debt, and the market is asking . A swap pricing schedule is shown below for a 2-year fixed-for-floating coupon swap.

Describe LP's side of the swap.

Coupon Swap Pricing Schedule (BRL)

Maturity Bank Pays Fixed Rate Bank Receives Fixed Rate Current TN Rate 2 years 2-year 2-year 7.05%

This schedule assumes nonamortizing debt and semiannual rates (sa).

Quotes are against 6-month LIBOR BRL flat. TN = Brazilian Treasury Note rate.

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

Step by Step Answer:

Answer rating: 100% (QA)

Answered By

Deepak Pal

Hi there! Are you looking for a committed, reliable, and enthusiastic tutor? Well, teaching and learning are more of a second nature to me, having been raised by parents who are both teachers. I have done plenty of studying and lots of learning on many exciting and challenging topics. All these experiences have influenced my decision to take on the teaching role in various capacities. As a tutor, I am looking forward to getting to understand your needs and helping you achieve your academic goals. I'm highly flexible and contactable. I am available to work on short notice since I only prefer to work with very small and select groups of students. Areas of interest: Business, accounting, Project management, sociology, technology, computers, English, linguistics, media, philosophy, political science, statistics, data science, Excel, psychology, art, history, health education, gender studies, cultural studies, ethics, religion. I am also decent with math(s) & Programming. If you have a project you think I can take on, please feel welcome to invite me, and I'm going to check it out!

5.00+ 1+ Reviews 10+ Question Solved

Related Book For book-img-for-question