Assuming that the ELN offers a Fixed Coupon or Yield of 12.00% act/360, what is the future
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Question:
Assuming that the ELN offers a Fixed Coupon or Yield of 12.00% act/360, what is the future value in USD of this Fixed Coupon plus the Notional? Show your result to the nearest cent.
ii) Note that the USD interest rate in the termsheet is 1.20% p.a. act/360. What is the present value in USD of the amount calclated in (i)?
iii) Referring to your result for the embedded option value in Q2(vi), what is the implied mark-up amount in USD that the bank is earning?
iv) What would the ELN Fixed Coupon be (shown as an act/360 yield) for a mark-up of zero USD?
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