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NEW QUESTION: 3
Click on the Exhibit Button to view the Formula Sheet. You are paying 5% per annum paid semi-annually and receiving 6-month LIBOR on a USD 10 million interest rate swap with exactly two years to maturity. 6- month LIBOR for the next payment date is fixed today at 4.95%. You expect 6-month LIBOR in 6 months to fix at 5.25%, in 12 months at 5.35% and in 18 months at 5.40%. What do you expect the net settlement amounts to be over the next 2 years? Assume 30-day months.
A. pay 2,500, receive 12,500, receive 17,500, receive
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C. receive 2,500, pay 12,500, pay 17,500, pay 20,000
D. receive 250, pay 1,250, pay 1,750, pay 2,000
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