QUESTION 48 For the next 5 questions suppose the following data holds: Carlton Corporation entered into...

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QUESTION 48 For the next 5 questions suppose the following data holds: Carlton Corporation entered into a three-year cross currency interest rate swap to receive U.S. dollars and pay Swiss francs. The notional principal is $10 million. The 3-year swap rates are quoted in the next table: Swiss Franc Bid 1.93% U.S. dollar Ask Bid Ask 2.01% 5.52% 5.59% Assume the current spot exchange rate is S = SF1.25/$. How much U.S. dollars will Carlton receive in year 1 as a result of the currency swap? $201,000 $552,000 $559,000 $625,000 $650,000 QUESTION 44 For the next 4 questions suppose the following data holds: Polaris is taking out a $50,000,000 two-year loan at a variable rate of LIBOR plus 1.00%. The LIBOR rate will be reset each year at an agreed upon date. The current LIBOR rate is 3.00% per year. The loan has an upfront fee of 1.00%. What is the all-in-cost (AIC, i.e., the internal rate of return) of the Polaris loan including the LIBOR rate, fixed spread and upfront fee? Assume the LIBOR rate stays at 3% for the next two years. 4.11% 4.53% 4.76% 5.25% 5.67% QUESTION 36 For the next 8 questions suppose the following data holds: Philadelphia Exchange Swiss Franc (SF) 65.21 Calls Puts SF 62,500 cents per unit Vol. Last Vol. Last 64 May 20 1.85 10 0.30 65 May 30 0.50 50 0.50 64 Sep 20 X 40 Y 65 Sep 10 1.20 20 0.70 What is the time value of 64 May SF call option? $.64 $.75 $1.21 $1.51 O $1.95 QUESTION 48 For the next 5 questions suppose the following data holds: Carlton Corporation entered into a three-year cross currency interest rate swap to receive U.S. dollars and pay Swiss francs. The notional principal is $10 million. The 3-year swap rates are quoted in the next table: Swiss Franc Bid 1.93% U.S. dollar Ask Bid Ask 2.01% 5.52% 5.59% Assume the current spot exchange rate is S = SF1.25/$. How much U.S. dollars will Carlton receive in year 1 as a result of the currency swap? $201,000 $552,000 $559,000 $625,000 $650,000 QUESTION 44 For the next 4 questions suppose the following data holds: Polaris is taking out a $50,000,000 two-year loan at a variable rate of LIBOR plus 1.00%. The LIBOR rate will be reset each year at an agreed upon date. The current LIBOR rate is 3.00% per year. The loan has an upfront fee of 1.00%. What is the all-in-cost (AIC, i.e., the internal rate of return) of the Polaris loan including the LIBOR rate, fixed spread and upfront fee? Assume the LIBOR rate stays at 3% for the next two years. 4.11% 4.53% 4.76% 5.25% 5.67% QUESTION 36 For the next 8 questions suppose the following data holds: Philadelphia Exchange Swiss Franc (SF) 65.21 Calls Puts SF 62,500 cents per unit Vol. Last Vol. Last 64 May 20 1.85 10 0.30 65 May 30 0.50 50 0.50 64 Sep 20 X 40 Y 65 Sep 10 1.20 20 0.70 What is the time value of 64 May SF call option? $.64 $.75 $1.21 $1.51 O $1.95