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NEW QUESTION: 1
The Pairagain mutual fund has entered into an equity swap with SingleSol, LLC, with a notional principal of
$50 million. Pairagain has agreed to pay the quarterly return on the NASDAQ 100 in exchange for a fixed rate of 7.0%. The initial price of the NASDAQ 100 was 1825, and the value at the end of the first quarter,
91 days later, was 1755. The swap uses a 365-day year convention. What is the net payment to be made at the end of the first quarter?
A. SingleSol pays $872,603.
B. SingleSol pays $1,917,808.
C. SingleSol pays $2,790,411.
Answer: C