Question: help me solve this and show me all the steps please Q.6 Swaps (10pts) a) Define and explain what a swap is using the bond

help me solve this and show me all the steps please

Q.6 Swaps (10pts) a) Define and explain what a swap is using the bond portfolio method for the case of a financial institution that pays the floating rate (6-month LIBOR) and receives the fixed annual rate (semiannual compo.) institution that pays the floating rate (6-month LIBOR) and receives the fixed rate per year (semiannual compo.) b) Assume the following data: - principal: 152M: - ZC LIBOR (cont.). payment received: 3 months =10.1296,9 months = 10.34% and 15 months =10.73% : - annual fixed rate is 8.03% (semi-annual compounding): -6-month LIBOR rate paid by the financial institution (one payment) 10.049e - the maturity of the swap is 1.25 year. Calculate the value of the swap using the formula in a). Q.6 Swaps (10pts) a) Define and explain what a swap is using the bond portfolio method for the case of a financial institution that pays the floating rate (6-month LIBOR) and receives the fixed annual rate (semiannual compo.) institution that pays the floating rate (6-month LIBOR) and receives the fixed rate per year (semiannual compo.) b) Assume the following data: - principal: 152M: - ZC LIBOR (cont.). payment received: 3 months =10.1296,9 months = 10.34% and 15 months =10.73% : - annual fixed rate is 8.03% (semi-annual compounding): -6-month LIBOR rate paid by the financial institution (one payment) 10.049e - the maturity of the swap is 1.25 year. Calculate the value of the swap using the formula in a)

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