A portfolio manager enters into a total return swap. She swaps 50% of her $50 million index based portfolio for 4.5% yield bonds
If the annualized total return on the index is 2.5%, what net cash flow will the manager experience under the swap agreement?
A) + $250,000
B) -$250,000
C) + $500,000
D) -$500,000
C
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Exhibit 20-4 On January 1, 2016, Average Leasing Company entered into a direct financing lease with a lessee, Lenny Company. The lease agreement calls for five equal annual payments of $75,000 at the beginning of each year with the first payment due on January 1, 2016. The leased property has an estimated residual value of $10,000, which Lenny does not guarantee. The property remains the property
of Average at the end of the lease term. Average desires a 12% rate of return. Present value factors for a 12% interest rate are as follows: Present value of $1 for n = 1 0.892857 Present value of $1 for n = 5 0.567427 Present value of an ordinary annuity for n = 5 3.604776 Present value of an annuity due for n = 5 4.037349 ? Refer to Exhibit 20-4. Given the structure of the lease, the payments, and the residual value information, what is General's net investment in the lease during 2017 (round the answer to the nearest dollar)? A) $248,475 B) $158,475 C) $186,492 D) $264,137
______ checks include not only calls to references that are provided by the applicant, but also reference letters from employers, personal letters of recommendation, and possibly cold calls to previous employers.
A. Credit B. Reference C. Web D. Criminal background
Common terminology refers to the calculations for amortizing a financial instrument to its maturity value over time as the imputed interest method
Indicate whether the statement is true or false
Which of the following is NOT one of the steps in the risk management process?
A. Risk assessment B. Risk identification C. Risk response development D. Risk response control E. Risk tracking