With the IRS Syarikat A has effectively turned its floating rate payable into a

With the irs syarikat a has effectively turned its

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reduced returns to its clients.- KLMB can enter a 3-year IRS of RM50 million notional principal as the floating ratepayer to maintain steady returns in the face of falling ST rates.- In the swap, KLMB essentially passes through its earnings from 3-month paper to thecounterparty as the 3-month KLIBOR.- It receives in exchange a fixed rate of X%.- As a result, KLMB can be assured of providing its clients with a return approximating X% even though ST rates are falling.8. 5 variables that determine the option prices under BSOPMStock / UnderlyingAsset Price- The change in stock / underlying asset price is positively correlatedto call values & negatively to puts. - This relationship between underlying asset price & option valuesare known as deltas.Exercise Price- The ~ has a negative correlation with call options & a positive onewith put options.- Raising the ~ benefits put options but works against calls.
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