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Metro Do Porto: An Interest Rate Swap 1)Analyze the swap structure and comment on whether MdP entered into a speculative transaction or one designed to
Metro Do Porto: An Interest Rate Swap
1)Analyze the swap structure and comment on whether MdP entered into a speculative transaction or one designed to reduce risk.
2)Compute MdP's net cash flow on payment dates.
3)What might motivate company executives and bankers to enter into such contracts?
4)Suggest methods to reduce the risk of derivatives mishaps in companies.
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