3. Consider a semiannual payment floating-rate security whose coupon rate is determined as: reference rate + 42.5 basis points Assume its term to maturity is 5 years and current price is 99.625. What is the discount margin of the floater if the initial reference rate is 8%? (4 point) Current coupon rate = 8% +.425% = 8.425% Par = 100 PMT = 100* 8.425% / 2 =4.2125 N = 5*2 = 10 PV = -99.625 I/Y = 4.26% Require Yield = Discount Margin = 3. Consider a semiannual payment floating-rate security whose coupon rate is determined as: reference rate + 42.5 basis points Assume its term to maturity is 5 years and current price is 99.625. What is the discount margin of the floater if the initial reference rate is 8%? (4 point) Current coupon rate = 8% +.425% = 8.425% Par = 100 PMT = 100* 8.425% / 2 =4.2125 N = 5*2 = 10 PV = -99.625 I/Y = 4.26% Require Yield = Discount Margin =