A 5-year floating-rate security was issued on 1 January 2015. The coupon rate formula was 1-year LIBOR + 300 bps with a cap of 10%, a floor of 4% and annual reset. The 1-year LIBOR rate on 1 January of each year of the security’s life is provided in the following table: 

Year                  LIBOR 

2015                 3.5% 

2016                 4.0% 

2017                 3.0% 

2018                 2.0% 

2019                  1.5%

Determine the amount of coupon rate on which the payments was owed by the issuer  during 2019.

Answer rating: 100% (QA)

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