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ticktrader ticktrader
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8 months ago
ABC Bank enters into a credit default swap with XYZ Financial. The swap runs for 5 years and is based upon a term loan to LMN Corp. The size of the protection payment is 5% per year. Unfortunately, LMN goes bankrupt a year after this swap agreement becomes effective. Even with a 75% recovery value on the underlying loan, XYZ has paid ABC $20 million for settlements. How much has ABC lent to LMN?


▸

$100 million



▸

$80 million



▸

$50 million



▸

$20 million

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
Authors:
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isaw09isaw09
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8 months ago
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ticktrader Author
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8 months ago
Correct Slight Smile TY
Chaldoren
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Yesterday
this is exactly what I needed
aznzergs
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2 hours ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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