Purchase Solution

OZEN Forward rate agreement with Bank-ZQ: determine cost of loan in two cases

Not what you're looking for?

Ask Custom Question

(ii) OZEN Inc plans to borrow £6 million in 180 days. The loan will be taken out at the appropriate LIBOR rate on the day the loan commence and will be repaid in full 90 days later. OZEN Inc would like to lock in the rate it pays by entering into a forward rate agreement with Bank-ZQ. Bank-ZQ agrees to lock in a rate of 11 percent.

Determine the annualised cost of the loan for each of the following outcomes, assuming interest is based on 90 days and a 365 day year:
(a) LIBOR in 180 days is 15 percent.
(b) LIBOR in 180 days is 9 percent.

Purchase this Solution

Solution Summary

In the attachment, the solution presents the calculations, the conclusions and explanations for the answers. LIBOR annualised cost of the loan is found.

Purchase this Solution

Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.


This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.