Is there an error in the answer to this question? It seems to me the answer shown for value of $ floating side is incorrect. Shouldn’t it be: $10,500 x .9923 + $1,010,500 x .9791 = $999,799.70 instead of what they have provided as an answer: $1,010,500 x .9923 = $1,002,719 Am I missing something? I appreciate any guidance.
if they are saying value to the floating is what the fixed side pays - then they are correct… what you have calculated is what the floating pays - hence what the value would be TO the fixed side.
Dear CP, Thank you for your note - but unfortunately, I don’t quite understand the distinction you are making. Can you please elaborate? Many thanks.