A major international bank makes a $7.5 million 270-day pure discount loan at LIBOR of 7.9%. At

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Question:

A major international bank makes a $7.5 million 270-day pure discount loan at LIBOR of 7.9%. At the same time, however, it exercises an interest rate put that has a strike of 9.75%. Find the annualized rate of return on the loan. Ignore the cost of the put.