spartan1

Karan…
as you mentioned…”to the bank he has to pay 4.75 (libor) + .005 (50 basis points) on EUR 15 mil and he receives ( from the swap agreement) only 4.75 (libor when the swap was initiated) on EUR 15 mil….these are floating rate payments and will be made on a basis of 180 days”…..
do you divide by 365 or 360 ? Answer key is dividing 365….but quetion says company use 360 for floating rate (in this case, LIBOR + .50). i m confused.
Thanks again.