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XYZ is a BBB rated company with a credit spread of 1.50%. It expects interest rate will increase in future. Today, it wants to lock
XYZ is a BBB rated company with a credit spread of
1.50%. It expects interest rate will increase in future.
Today, it wants to lock in the 3-month interest rate
between next December and March.
Currently, next December Eurodollar futures price is
97.18 and March Eurodollar futures price is 97.55.
At which rate, can XYZ lock in to borrow for 3 months
starting in next December?
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Economics For Financial Markets
Authors: Brian Kettell
1st Edition
0750653841, 978-0750653848
