Value of Commodity Swap

CFA Level III Portfolio Management
#1

How to Calculate value of commodity swap in the Ti BA II Plus calculator.

The question is say the forward price of oil is $22 next year and $24 year after that. The rate of interest is 5% and 5.5% respectively, hence the PV of the forward contracts is $42.515.

The Swap Value is x/1.05 + x/1.055^2 = 42.515.

How to solve for x in the calculator?

Thanks a lot for the help.

Regards,

#2

take out the common x

x [1/1.05 + 1/1.055^2] = 42.515

use calc to now do the number juggling.

#3

Gross!

Sounds like algebra!

#4

Thanks. enlightened

Sometimes such stuff happens during exam stress.