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Q2. For a $100 million equity swap with semiannual payments and an initial stock index level of 2000, one party pays a fixed rate of
Q2. For a $100 million equity swap with semiannual payments and an initial stock index level of 2000, one party pays a fixed rate of 5.5 percent assuming 30 days per month and 360 days in a year.
- On the first payment date, if the stock index is at 2173, determine the net swap payment
- and specify which party makes the payment.
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