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    Swaps: Firm Fixed Rate (%) Floating Rate (%)

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    HarshUpadhyay
    1. The document describes several currency swap agreements between different companies. In the first two examples, it provides the exchange rates and notional amounts at initiation and end of one-year contracts to calculate the principal amounts exchanged. 2. It then gives examples of two firms that want to borrow at different interest rates - fixed vs floating. A swap deal can benefit them by allowing each to pay the rate the other prefers. 3. Two additional examples show how currency swaps can similarly benefit companies that want to borrow different currencies at different interest rates. The swaps allow each company to effectively borrow at the terms the counterparty prefers.

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    Swaps: Firm Fixed Rate (%) Floating Rate (%)

    Uploaded by

    HarshUpadhyay
    11 views1 page
    1. The document describes several currency swap agreements between different companies. In the first two examples, it provides the exchange rates and notional amounts at initiation and end of one-year contracts to calculate the principal amounts exchanged. 2. It then gives examples of two firms that want to borrow at different interest rates - fixed vs floating. A swap deal can benefit them by allowing each to pay the rate the other prefers. 3. Two additional examples show how currency swaps can similarly benefit companies that want to borrow different currencies at different interest rates. The swaps allow each company to effectively borrow at the terms the counterparty prefers.

    Original Description:

    it will help to practice swaps sums

    Original Title

    Swaps practice

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    1. The document describes several currency swap agreements between different companies. In the first two examples, it provides the exchange rates and notional amounts at initiation and end of one-year contracts to calculate the principal amounts exchanged. 2. It then gives examples of two firms that want to borrow at different interest rates - fixed vs floating. A swap deal can benefit them by allowing each to pay the rate the other prefers. 3. Two additional examples show how currency swaps can similarly benefit companies that want to borrow different currencies at different interest rates. The swaps allow each company to effectively borrow at the terms the counterparty prefers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    11 views1 page

    Swaps: Firm Fixed Rate (%) Floating Rate (%)

    Uploaded by

    HarshUpadhyay
    1. The document describes several currency swap agreements between different companies. In the first two examples, it provides the exchange rates and notional amounts at initiation and end of one-year contracts to calculate the principal amounts exchanged. 2. It then gives examples of two firms that want to borrow at different interest rates - fixed vs floating. A swap deal can benefit them by allowing each to pay the rate the other prefers. 3. Two additional examples show how currency swaps can similarly benefit companies that want to borrow different currencies at different interest rates. The swaps allow each company to effectively borrow at the terms the counterparty prefers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    SWAPS

    1. M/S jayanti and Co. enters into a currency swaps agreement with M/S
    Dharmika & Co. M/S jayanti and Co. will pay $ and receive

    (at the time of

    initiation of contract). Term of swap if 1 year. Exchange rate at initiation of


    contract is 1$= 40 and at end of contract is 1$= 45. Find principal amount
    that will be exchanged between 2 parties at initiation and end of the
    contract. Notional amount of contract is $1, 00,000.
    2. M/s. Bhoomi and Co. enters into a currency swaps agreement with M/s. jeel
    and Co. M/s. Bhoomi and Co.will pay and receive

    (at the time of initiation

    of contract). Term of swap if 1 year. Exchange rate at initiation of contract is


    1$= 42 and at end of contract is 1$= 47. Find principal amount that will be
    exchanged between 2 parties at initiation and end of the contract. Notional
    amount of contract is $2, 00,000.
    3. Consider 2 Firm A &B. Both have to borrow 1,00,000.
    Firm
    Fixed Rate (%)
    Floating Rate (%)
    A
    10
    MIBOR+8
    B
    12
    MIBOR+11
    Firm A wants to borrow in fixed Rate. Firm B wants to borrow in floating rate.
    Explain how a swap deal can benefit them.
    4. Consider 2 Firm X &Y. Both have to borrow 5,00,000.
    Firm
    Fixed Rate (%)
    Floating Rate (%)
    X
    12
    MIBOR+10
    Y
    14
    MIBOR+13
    Firm X wants to borrow in fixed Rate. Firm Y wants to borrow in floating rate.
    Explain how a swap deal can benefit them.
    5. Consider 2 Firm A &B. Firm have to borrow $2000. Firm B have to borrow
    1,00,000. Additionally 1$= 50.
    Firm
    $ (%)
    (%)
    A
    10
    8
    B
    9
    12
    Explain how a swap deal can benefit them.
    6. Consider 2 Firm X&Y. Firm X have to borrow $10000. Firm Y have to borrow
    5,00,000. Additionally 1$= 50.
    Firm
    $ (%)
    X
    12
    Y
    10
    Explain how a swap deal can benefit them.

    (%)
    9
    11

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