Question: Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are $86, $71, and $58, respectively. The 1-year effective annual interest

Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are $86, $71, and $58, respectively. The 1-year effective annual interest rate is 5.5%, the 2-year interest rate is 5.8%, and the 3-year interest rate is 6.3%. What is the 3-year swap price?

	a.	$193.23
	b.	$64.41
	c.	$72.27
	d.	$78.20
	e.	$54.56

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are$85, $75, and $65. The 1-year effective annual interest rate is 3.9%, the 2-yearinterest rate is 4.5%, and the 3-year...

2. Suppose that oil forward prices for 1 year, 2 years, and 3 years are $20, $21, and $22. The 1-year effective annual interest rate is 6.0%, the 2-year interest rate is 6.5%, and the 3-year interest...

Suppose that oil forward prices for 1 year, 2 years, and 3 years are $20, $21, and $22. The 1-year effective annual interest rate is 6.0%, the 2-year interest rate is 6.5%, and the 3-year interest...

.2 Suppose that oil forward prices for 1 year, 2 years, and 3 years are $20,$21, and $22. The 1-year effective annual interest rate is 6.0%, the 2-year interest rate is 6.5%, and the 3 -year interest...

Suppose that oil forward prices for 1 year, 2 years, and 3 years are $20, $21, and $22.The 1-year effective annual interest rate is 6.0%, the 2-year interest rate is 6.5%, and the 3-year interest...

Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are$143, $149, and $174 respectively. The 1-year effective annual interest rate is 6.1% the 2-year interest rate is 5.6%, and...

Suppose that a commodity's forward prices for 1 year, 2 years, and 3 years are $143,$149, and $174, respectively. The 1-year effective annual interest rate is 6.1%, the 2 -year interest rate is 5.696...

Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are $50, $54, and $63, respectively. The 1-year effective annual interest rate is 3.7%, the 2-year interest rate is 4.5%, and...

1a) Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are $72, $62, and $56, respectively. The 1-year effective annual interest rate is 4.9%, the 2-year interest rate is 5.6%,...

Suppose that a commoditys forward prices for 1 year, 2 years, and 3 years are $119, $127, and $136. The 1-year effective annual interest rate is 5.5%, the 2-year interest rate is 6.1%, and the 3-year...

Revenues Subsidiary Ledger accounts classified by major revenue source category and Expenditures Subsidiary Ledger accounts classified by function. Could more detailed subsidiary ledger accounts be...

Summarize the steps an enterpriser should take to sell the business to an outside party.

# 6 Assuming the data is in both Caboodle and Clarity, which database should be your first choice for reporting?SELECT ONE OF THE FOLLOWING ( 1 PT ) A . CaboodleB.There is no advantage to eitherC....

last two options for the multiple choice are : performance management development A construction equipment manufacturer, Roswell Corporation, is focusing on becoming a leader in sustainability in...

6. I resist the temptation to feel entitled to better treatment and to lose emotional control.

5. When verbally attacked, I keep my role as a manager separate from my identity as a person.

2. What potential barriers would you encourage Samuel to avoid?