Question: 2. Collared floater is a floating-rate note that has both a floor and cap on the interest rate. Consider a 1.5-year collared floater that makes

 2. Collared floater is a floating-rate note that has both a

2. Collared floater is a floating-rate note that has both a floor and cap on the interest rate. Consider a 1.5-year collared floater that makes payment every six months according to the rule: a. If ri 6.5%, the interest payment of the collar floater on date i + 1 is face value x 6.5% In addition, at maturity, the collared floater returns the $100 principal amount. Using the risk-neutral tree derived for Question 1, price $100 face amount of the collared floater. 2. Collared floater is a floating-rate note that has both a floor and cap on the interest rate. Consider a 1.5-year collared floater that makes payment every six months according to the rule: a. If ri 6.5%, the interest payment of the collar floater on date i + 1 is face value x 6.5% In addition, at maturity, the collared floater returns the $100 principal amount. Using the risk-neutral tree derived for Question 1, price $100 face amount of the collared floater

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