NZ Bank issues 90 day commercial paper in the US market with a face value of USD25

Fantastic news! We've Found the answer you've been seeking!

Question:

NZ Bank issues 90 day commercial paper in the US market with a face value of USD25 million at 1.75% p.a. They use an FX swap to hedge their FX exposure. (For the U.S. use a 360-day year but assume simple interest calculations). Required:

(a) Calculate the forward rate component of the FX swap if the spot rate is AUD/USD 0.7300 and the Australian interest rate is 3.5% p.a.;

(b) Calculate the AUD proceeds from the commercial paper issue and the AUD amount required at maturity;

Related Book For answer-question

Systems analysis and design

ISBN: ?978-1118808177

5th edition

Authors: Alan Dennis, Barbara Haley Wixom, Roberta m. Roth

See More Books

Posted Date: Nov 14, 2022 05:40 AM

See More Questions

The Stork Club is a chain of baby clothing stores. The owner of the chain divided a number of bonnets equally among the 7 stores in the chain. If each store got 9 bonnets, what was the number of...
The Running Store is a chain of sporting goods stores. The Running Store is interested in using some of its excess cash to invest in securities. It decides to buy the following securities: Prepare...
The Top Hat, Inc., is a chain of magic shops that is organized as a corporation. During the month of June, the stockholders equity accounts of The Top Hat were affected by the following events: June...
Julie is the insured on a $300,000 ordinary life insurance policy. Julie sells her life insurance policy to Ben for $20,000. Ben promptly named himself beneficiary. The policy had a cash surrender...
When ordering a new box of harmonicas, let X denote the time (in hours) until the box arrives, and let Y denote the number of harmonicas that work properly.
Identify the errors in the following schedule of cost of merchandise sold for the current year ended July 31,2010: Cost of merchandise sold: Merchandise inventory, July 31, 2010 Purchases Plus:...
True or False: If $\operatorname{IRR}(\mathrm{A})>\operatorname{IRR}(\mathrm{B})$, then $\operatorname{ERR}(\mathrm{A})>\operatorname{ERR}(\mathrm{B})$.
On January 1, 2017, Harter Company had Accounts Receivable $139,000, Notes Receivable $25,000, and Allowance for Doubtful Accounts $13,200. The note receivable is from Willingham Company. It is a...
Jobs R Us, Inc. Is a recruiting firm that specializes in post- college placement in the finance industry. Its clients are currently concentrated in the North-Eastern United States lt is contemplating...
Niagara Dairy is a boutique cheese maker based in the Niagara region of Ontario. Over the years, the business has grown by supplying local retailers and, eventually, by exporting cheese products. In...
Paul's Mechanics owns the following long-lived assets: Asset Building Vehicles Date Purchased January 1, 2017 December 31, 2020 Equipment July 1, 2019 Cost $78,750 35,600 12,320 Estimated Useful Life...
File CountLetters.java contains a program that reads a word from the user and prints the number of occurrences of each letter in the word. Save it to your directory and study it, then compile and run...
Make a set of Java classes to simulate a line of Contestants. You are given the class Person, and you will make a Contestant class, where Contestant extends Person. Start simple to make sure your...
x ' y ' + yz + xz + ( xz ) ' simplyfy this to minSOP with clear steps
a Develop Combined Results - Pro from a Balance Sheet Using the appropriate column on Financing Balance Sheet spreadsheet add relevant accounting figures from the accepted Project Equipment and...
H.T. Tan Company is preparing the annual financial statements dated December 31 of the current year. Ending Inventory Information about the five major Items stocked for regular sale follows: ENDING...
Discuss some of the sources for revenue for all types of hospitals. Are there any differences in the controls needed for for-profit and nonprofit?Contrast the differences in accounting for...
Consider the discrete group G of order 8 that has the following Cayley diagram e If we have the sequence of operations: fcagec, which of the options represents the reduction of the sequence to a...
Why should the system request be created by a businessperson as opposed to an IS professional?
What is a function point, and how is it used?
Describe five types of messages.
A candlestick chart is similar to a bar chart except that the candlestick chart: A. Represents upward movements in price with Xs. B. Also graphically shows the range of the periods highs and lows. C....
What considerations might encourage a market analyst to rely more on a top-down or bottom-up forecast of S&P 500 operating earnings?
Which of the following advantages listed by Ryan with respect to the earnings-based approach studied by Atkinson is most likely correct? The model A. Can be used for non-U.S. equity markets. B....

NZ Bank issues 90 day commercial paper in the US market with a face value of USD25

Question:

Expert Answer:

a The forward rate component of the FX swap is calculated as follows Forward rate Spot rate x 1 Dome... View the full answer

Systems analysis and design

Students also viewed these accounting questions