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Two parties A and B enter into a Swap contract in which in 6 months the net amount of the following payments for a notional
Two parties A and B enter into a Swap contract in which in months the net amount of the following payments for a notional amount of $ billion:
A agrees to pay B the percentage change in the Dow Jones Industrial Index DJIA over the months multiplied by the notional amount. If the DJIA falls, then A is to pay a negative amount, that is it will receive cash from this part of the contract
B agrees to pay A the percentage change in the S&P over the months multiplied by the notional amount.. If the S&P falls, then B is to pay a negative amount, that is it will receive cash from this part of the contract
In months time the DJIA has risen by while the S&P has risen by What will be As total cash flow from this forward contract the total of the cash received from both parts of the contract
Give your answers in $millions, for example if the answer is $ million, then enter in the answer box. If your answer is negative, put a sign in front of the number rather than etc.
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