Question: A two-year fl oating-rate note pays 6-month Libor plus 80 bps. Th e fl oater is priced at 97 per 100 of par value. Current

A two-year fl oating-rate note pays 6-month Libor plus 80 bps. Th e fl oater is priced at 97 per 100 of par value. Current 6-month Libor is 1.00%. Assume a 30/360 day-count convention and evenly spaced periods. Th e discount margin for the fl oater in basis points is closest to:

A . 180 bps.

B . 236 bps.

C . 420 bps.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Fixed Income Analysis Questions!

Q:

21. A two-year floating-rate note pays 6-month Libor plus 80 bps. The floater is priced at 97 per 100 of par value. Current 6-month Libor is 1.00%. Assume a 30/360 day-count convention and evenly...

Q:

A 5-year floating-rate note pays 6-month Libor plus 80 bps. The floater is priced at 97 per 100 of par value. Current 6-month Libor is 1.00%. Assume a 30/360 day-count convention and evenly spaced...

Q:

A 2%, 3-year US Treasury is selling at 100.25 . The 5% , 3-year IBM is selling at 100.65. Both bonds pay interest semi-annually. The G-spread in basis points on the IBM bond is closest to a. 264 bps....

Q:

A 3-year floating-rate note pays 6-month Libor plus 140 bps. The floater is priced at 97 per 100 of par value. Current 6-month Libor is 1.00%. Assume a 30/360 day-count convention and evenly spaced...

Q:

A two-year floating-rate note pays six-month Libor plus 80 bps. The floater is priced at 97 per 100 of par value. The current six-month MRR is 1.00%. Assume a 30/360 day-count convention and evenly...

Q:

A 3-year floating-rate note pays 6-month Libor plus 140 bps. The floater is priced at 97 per 100 of par value. Current 6-month Libor is 1.00%. Assume a 30/360 day-count convention and evenly spaced...

Q:

A two-year floating-rate note pays six-month Libor plus 80 bps. The floater is priced at 97 per 100 of par value. The current six-month MRR is 1.00%. Assume a 30/360 day-count convention and evenly...

Q:

A two-year floating-rate note pays 6-month Libor plus 100 bps. The floater is priced at 96 per 100 of par value. Current 6-month Libor is 1.50%. Assume a 30/360 day-count convention and evenly spaced...

Q:

Question: A two-year floating-rate note pays 6-month Libor plus 100 bps. The floater is priced at 96 per 100 of par value. Current 6-month Libor is 1.50%. Assume a 30/360 day-count convention and...

Q:

A two-year floating-rate note pays 6-month Libor plus 100 bps. The floater is priced at 96 per 100 of par value. Current 6-month Libor is 1.50%. Assume a 30/360 day-count convention and evenly spaced...

Q:

Show the reagents and intermediates involved in the other order of synthesis of dec-3-yne, by adding the ethyl group first and the hexyl group last.

Q:

On January 1, 2011, ABC Manufacturing Corporation leased a machine to Start Corporation. The machine had cost ABC $480,000 to manufacture, and would normally have sold for about $600,000. The 10-year...

Q:

National Aviation Collage Department of accounting and finance Fundamental of accounting II Worksheet 1) On July 17, 2001, received a $12,000, 90-day, 10% note on account from Adams Co. Determine: a)...

Q:

To approximate the reciprocal of a number a without using division, we can apply Newtons method to the function f(x) = 1/x - a. a. Verify that Newtons method gives the formula x n + 1 = (2 - ax n )x...