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arunasingh5 arunasingh5
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A year ago
ABC Bank enters into a credit default swap with XYZ Financial. The notional amount of the swap is $50 million. The 5-year swap is based upon a 5-year loan to LMN Corp. The size of the protection payment is 3% per year. As LMN bankrupts during the time this swap is still valid, XYZ has paid ABC $22.5 million for settlements. What is the recovery ratio on the underlying loan?


▸

60%



▸

55%



▸

45%



▸

40%

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
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jgunn88jgunn88
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A year ago
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A year ago
Thanks for your help!!
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this is exactly what I needed
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