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An instant ago, you agreed to pay $950/oz in a 2 year swap of 100 oz. platinum with annual payments. Now the 1 and 2
An instant ago, you agreed to pay $950/oz in a 2 year swap of 100 oz. platinum with annual payments. Now the 1 and 2 year forward platinum prices are $900 and $950/oz., respectively, while the 1 and 2 year spot (zero coupon) interest rates are 4% and 4.5%, respectively. Determine the new swap price/oz. and the swaps $ value. Show your work and be accurate to 3 decimal places. All rates are annual with annual compounding.
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