QUESTIONS 91 THROUGH 96 RELATE TO DERIVATIVE INVESTMENTS.

70, - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2013 70, - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2013
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2013

70,000,000. The European company pays a fixed rate of 5% and the bank pays a fixed rate of 4.5%.

Payments are made semiannually on a basis of 30 days per month and 360 days per year. What is

the payment from the bank to the company at the end of year 4?

A.

USD 1,750,000.

B.

EUR 1,125,000.

C.

EUR 1,250,000.