Kelompok 3 interest rate tugas kelompok PDF

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Download Kelompok 3 interest rate tugas kelompok PDF

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Kelompok 3 Ajeng Alfiani – 01017210041 Indah Lestari – 01017210040 Maghfirotun Nisa – 01017210036 Melinda Fitriyani - 01017210037 Restu Aulia Putri – 01017210045

Soal 1 Wall company and Table company need to raise funds for capital improvements at their manufacturing plants. Wall company can borrow funds either at an 8 percent fixed rate or at SBI+2 percent floating rate. Table company can borrow funds at the debt market either at a 11 percent fixed rate or at SBI+1 percent floating rate. a.

Is there an opportunity here for Wall and Table company to do interest rate swap? Explain! Answer: There is an opportunity for Wall and Table to do interest swap. Wall better in fixed rate and Table better in floating rate. Wall can borrow at cheaper rate than Table in fixed rate (8% compared to 11%). Table can borrow at cheaper rate than Wall in floating rate (SBI+1% than SBI+2%).

b.

Suppose the dealer in the swaps market demand 2 percent of profit, describe how these two-company can do interest rate swap! Use diagram to explain your answer! Answer: If the swap dealer demands 2 percent of profit, the profit would be taken from: Fixed-rate spread = (11% - 8%) / 2 = 1.5% Floating-rate spread = (2% - 1%) / 2= 0.5% Total profit = 2% Table pays 9,5% fixed rate (less 1,5% than debt market i.r) to swap dealer which by swap dealer it pays only 8% to Wall (net profit 1,5%) Wall pays SBI +1,5% (less 0,5% than debt market i.r) to swap dealer which by swap dealer it pays only SBI+1% to Table (net profit 0,5%)

Fixed 8% Wall Company

Swap Dealer SBI 1,5%

Fixed 8%

Debt Market

SBI +1% Table Company Fixed 9,5% SBI +1%

Debt Market

Soal 2 NECE company and KBC company need to raise funds for capital improvements at their manufacturing plants. NECE company can borrow funds either at an 5 percent fixed rate or at EURIBOR+2 percent floating rate. KBC company can borrow funds at the debt market either at a 8 percent fixed rate or at EURIBOR+1 percent floating rate. a. Is there an opportunity here for NECE and KBC company to do interest rate swap? Explain! Answer: NECE and KBC has an opportunity to do interest swab. There is an absolute advantage. Here, NECE can borrow at a cheaper rate than KBC in fixed rate (5% compared to 8%) and KBC can borrow at a cheaper rate than NECE in floating rate (EURIBOR+1% as compared to EURIBOR+2%). So, NECE has absolute advantage in borrowing in fixed rate and KBC has absolute advantage in borrowing in floating rate. In this case, NECE will borrow at fixed rate and KBC will borrow at floating rate. However, by interest rate swap, NECE will pay floating rate to KBC and receive fixed rate from KBC. Thus, the effective borrowing of NECE will be in floating rate and that of KBC in fixed rate So, they have the ability to do interest rate swap because each of the firm have comparative advantage. b. Suppose the dealer in the swaps market demand 2 percent of profit, describe how these two company can do interest rate swap! Use diagram to explain your answer! Answer: - KBC Pays 6,5% Fixed rate (less 1,5% than debt market i.r) to swap dealer which by swap dealer it pays only 5% to NECE (net profit 1,5%) - NECE Pays Euribor + 1,5% (less 0,5% than debt market i.r) to swap dealer which by swap dealer it pays only Euribor+1% to KBC(net 0,5% profit) NECE : FIXED 5% or EURIBOR +2% Floating rate KBC : FIXED 8% or EURIBOR + 1% Floating rate Fixed 6,5%

Fixed 5% NECE

Fixed 5%

Debt Market

Swap Dealer EURIBOR 1,5%

KBC EURIBOR 1% EURIBOR 1%

Debt Market...