Richa Patel (Article) (166 Points)
11 April 2014The following que is given in sfm rtp which am not able 2 understand after lot of efforts. I dont understand what calculations are made to arrive at the ans. Kindly pls hlp me with the calculation of figures given in answer. Pls pls do rply if u knw...
QUE NO 4 INTEREST RATE COLLARS
The que can be found in the file attached together with answer.Pls just point out how figures are arrived in answer.
pls pls pls do rply
nipun
(student)
(55 Points)
Replied 12 April 2014
Richa Patel
(Article)
(166 Points)
Replied 13 April 2014
| Originally posted by : nipun | ||
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It seems the reference point is wrongly taken in d solution... As per d question d reference fr d collar is 6 month libor so if d givn 6 monthly libor rates in d question breaches d cap or a floor only thn it is executed for eg on june 15 & dec 15, howver in d solution tey hve tken libor + 50 bps as d reference rate fr d collar nd accordingly calculatd d cap/floor amt which I think is incorrect. |
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Actually am even confused with the answers they give..wid no method am able 2 g8 it..n den they ask ques from rtp in xms..
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