Use the same term structure of zero-coupon yields. 1. What is the fair fixed rate in a 2-year interest rate swap in which fixed and floating payments are exchanged every six months? Note that this is a little different from the lecture slides where payments were quarterly and the reference rate was the three-month spot rate. 2. Treat the two sides of the interest rate swap as a fixed coupon bond and a floating coupon bond as we did in class (by adding the notional to the end of the contract) Calculate the modified durations of the fixed coupon and floating coupon bonds. 3. Suppose that half a year passes. The term structure of zero-coupon yields is now Maturity r 0.5 0.01 1 0.015 1.5 0.02 Semi-annually compounded interest rates If you entered into a fixed-for-floating contract previously (with a notional of $100), what is the value of your position now? Why did you make or lose money? (Think about this in terms of how sensitive each side of the interest rate swap is to a change in interest rates.)

Suppose that jim plans to borrow money for an education at texas a& m university. jim will need to borrow $25,000 at the end of each year for the next five years (total=$125,000). jim wishes his parents could pay for his education but they can’t. at least, he qualifies for government loans with a reduced interest rate while he is in school. he has a special arrangement with aggiebank to lend him the money at a subsidized rate of 1% over five years without having to make a payment until the end of the fifth year. however, at the end of the fifth year, jim agrees to pay off the loan by borrowing from longhorn bank. longhorn bank will lend him the money he needs at an annual interest rate of 6%. jim agrees to pay back the longhorn bank with 20 annual payments and the payments will be uniform (equal annual payments including principal and interest). (i) calculate how much money jim has to borrow at the end of 5 years to pay off the loan with aggiebank. a. $121,336 b. $127,525 c. $125,000 d. $102,020 e. none of the above

Aproduction department's output for the most recent month consisted of 8,000 units completed and transferred to the next stage of production and 5,000 units in ending work in process inventory. the units in ending work in process inventory were 50% complete with respect to both direct materials and conversion costs. calculate the equivalent units of production for the month, assuming the company uses the weighted average method.

What is difference between fiscal year and tax year? explain in the simplest way.