Suppose that the coupon reset formula for a floating-rate bond is 1-month LIBOR + 220 basis points.
Question:
Suppose that the coupon reset formula for a floating-rate bond is 1-month LIBOR + 220 basis points.
a. What is the reference rate?
b. What is the quoted margin?
c. Suppose on a coupon reset date that 1-month LIBOR is 2.8%. What will the coupon rate be for the period?
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Step by Step Answer:
a The reference rate is the rate that is used in the coupon reset formula to d...View the full answer
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Related Book For 
Bond Markets Analysis And Strategies
ISBN: 9780253337535
10th Edition
Authors: Frank J. Fabozzi, Francesco A. Fabozzi
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