Question: A floating rate issue has the following coupon formula: 1 Year Treasury Rate + 30 Basis points with a cap of 7% and a floor

A floating rate issue has the following coupon formula: 1 Year Treasury Rate + 30 Basis points with a cap of 7% and a floor of 4.5%. The coupon rate is reset every year. Suppose the treasury rate is 6.9% at the second year reset date and 3.5% at the fifth year reset date, what is the coupon rate for the second year and the fifth year?

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