CMOS Chips is hedging a 20-year, S19 million, 8% bond payable with a 20-year interest rate swap and has designated the swap as a fair value hedge. The agreement called for CMOS to receive payment based on a 8% fixed interest rate on a notional amount of $19 million and to pay interest based on a floating interest rate tied to LIBOR. The contract calls for cash settlement of the net interest amount on December 31 of each year. At December 31, 2021, the fair value of the derivative and of the hedged bonds has increased by $109,000 because interest rates declined during the reporting period Required: 1-0. Does CMOS have an unrealized gain or loss on the derivative for the period? 1-b. Does CMOS have an unrealized gain or loss on the bonds? 1-c. Will earnings increase or decrease due to the hedging arrangement? 2. Suppose interest rates increased, rather than decreased, causing the fair value of both the derivative and of the hedged bonds to decrease by $109,000 Would CMOS have an unrealized gain or loss on the derivative for the period? b. Would CMOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? 3. Suppose the fair value of the bonds at December 31, 2021 had increased by $138.000 rather than $109,000, with the additional increase in fair value due to investors' perceptions that the creditworthiness of CMOS was improving a. Would CMOS have an unrealized gain or loss on the derivative for the period? b. Would CMOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? 4. Suppose the notional amount of the swap had been $21 million, rather than the $19 million principal amount of the bonds. As a result, at December 31, 2021, the swap's fair value has increased by $138.000 rather than $109.000, a. Would CMOS have an unrealized gain or loss on the derivative for the period b. Would CMOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? 5. Suppose Blos Corporation is an investor, having purchased all s19 million of the bonds issued by CMOS as described in the original situation above BIOS is hedging its investment, classified as available-for-sale with a 20-year interest rate swap and has designated the swap as a fair value hedge. The agreement called for BIOS to make payment based on a 8% fixed interest rate on a national amount of $19 million and to receive interest based on a floating interest rate tied to LIBOR a. Would Bios have an unrealized gain or loss on the derivative for the period due to interest rates having declined? b. Would BIOS have an unrealized gain or loss on the bonds? Prev 5 or 6 Next > 4. Suppose the notional amount of the swap had been $ 21 million, rather than the $19 million principal amount of the bonds. As a resultat December 31, 2021 the swap's fair value had increased by $138,000 rather than $109,000, a. Would CMOS have an unrealized gain or loss on the derivative for the period? b. Would CMOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? 5. Suppose BIOS Corporation is an investor, having purchased all $19 million of the bonds issued by CMOS as described in the original situation above BIOS is hedging its investment, classified as available for sale, with a 20-year interest rate swap and has designated the swap as a fair value hedge. The agreement called for BIOS to make payment based on a 8% fixed interest rate on a notional amount of $19 million and to receive interest based on a floating interest rate tied to LIBOR . Would BIOS have an unrealized gain or loss on the derivative for the period due to interest rates having decined? b. Would BIOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 Required Suppose Bios Corporation is an investor, having purchased all $19 million of the bonde issued by CMOS as described in the original situation above. Bros is hodging its Investment classified as available for sale, with a 20-year interest rate swap and has designated the swap as a fair value hedge. The agreement called for BIOS to make payment based on a 8% fixed interest rate on a notional amount of $19 million and to receive interest based on a floating interest rate tied to LIBOR-Would BIOS have an unrealized gain or loss on the derivative for the period due to interest rates having declined? Would Bros have an unrealized gain or loss on the bond would earnings increase or decrease due to the hedging arrangement? Show les 15 Would BIOS have an uncalized gain or loss on the derivative for the period due to interest rates having decined? Soud BIOS hava on unraizod gain or loss on the bonds? 5 Woudings house or decrease due to the hedging arrangement 4. Suppose the notional amount of the swap had been $21 million, rather than the $19 million principal amount of the bonds. As a result, at December 31, 2021, the swap's fair value had increased by $138,000 rather than $109,000 a. Would CMOS have an unrealized gain or loss on the derivative for the period? b. Would CMOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? 5. Suppose BIOS Corporation is an investor, having purchased all $19 million of the bonds issued by CMOS as described in the situation above. BIOS is hedging its investment, classified as available for sale, with a 20-year interest rate swap and has de the swap as a fair value hedge. The agreement called for BIOS to make payment based on a 8% fixed interest rate on a notional amount of $19 million and to receive interest based on a floating interest rate tied to LIBOR a. Would BIOS have an unrealized gain or loss on the derivative for the period due to interest rates having declined? b. Would BIOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required s Suppose interest rates increased, rather than decreased, causing the fair value of both the derivative and of the hedged bonds to decrease by $109,000. Would CMOS have an unrealized gain or loss on the derivative for the period? Would CMOS have an unrealized gain or loss on the bonds? Would earnings increase or decrease due to the hedging arrangement? Would CMOS have an unrealized gain or loss on the derivative for the period ? Would CMOS have an unrealized gain or loss on the bonds? 2-6. Would eamlogs Increase or decrease due to the hedging arrangement? 4. Suppose the notional amount of the swap had been $21 million, rather than the $19 million principal amount of the bonds. As a result, at December 31, 2021, the swap's fair value had increased by $138,000 rather than $109,000 a. Would CMOS have an unrealized gain or loss on the derivative for the period? b. Would CMOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? 5. Suppose BIOS Corporation is an investor, having purchased all $19 million of the bonds issued by CMOS as described in the origin situation above. BIOS is hedging its investment, classified as available for sale, with a 20-year interest rate swap and has designated the swap as a fair value hedge. The agreement called for BIOS to make payment based on a 8% fixed interest rate on a notional amount of $19 million and to receive interest based on a floating interest rate tied to LIBOR a. Would BIOS have an unrealized gain or loss on the derivative for the period due to interest rates having declined? b. Would BIOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Suppose the fair value of the bonds at December 31, 2021, had increased by $138,000 rather than $109,000, with the additional increase in fair value due to investors' perceptions that the creditworthiness of CMOS was improving. Would CMOS have an unrealized gain or loss on the derivative for the period? Would CMOS have an unrealized gain or loss on the bonds? Would earnings increase or decrease due to the hedging arrangement? Show less 3 Would CMOS have an unrealized gain or loss on the derivative for the period? Would CMOS have an unrealized gain or loss on the bonds? 3. Would earnings increase or decrease due to the hedging arrangoient Renaired Brid4 4. Suppose the notional amount of the swap had been $21 million, rather than the $19 million principal amount of the bonds. result, at December 31, 2021, the swap's fair value had increased by $138,000 rather than $109,000 a. Would CMOS have an unrealized gain or loss on the derivative for the period? b. Would CMOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? 5. Suppose BIOS Corporation is an investor, having purchased all $19 million of the bonds issued by CMOS as described in th situation above. BIOS is hedging its investment, classified as available for sale, with a 20-year interest rate swap and has des the swap as a fair value hedge. The agreement called for BIOS to make payment based on a 8% fixed interest rate on a notion amount of $19 million and to receive interest based on a floating interest rate tied to LIBOR. a. Would BIOS have an unrealized gain or loss on the derivative for the period due to interest rates having declined? b. Would BIOS have an unrealized gain or loss on the bonds? c. Would earnings increase or decrease due to the hedging arrangement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Suppose the notional amount of the swap had been s21 million, rather than the $19 million principal amount of the bonds. As a result, at December 31, 2021, the swap's fair value had increased by S138,000 rather than $109,000. Would CMOS have an unrealized gain or loss on the derivative for the period? Would CMOS have an unrealized gain or loss on the bonds? Would earnings increase or decrease due to the hedging arrangement? Show less Woud CMOS have an unrealized gain or loss on the derivative for the period? 4 Would CMOS have an unrealized gain or loss on the bonds? 46 Would earnings increase or decrease due to the hedging arrangement