A two$-$year floating$-$rate note $($FRN$)$ pays six$-$

month Libor plus $60bps.$ The floater is priced at

$98\mathrm{.}5$ per $100$ of par value. The current six$-$month

MRR is $1\mathrm{.}00\%.$ Assume a $30/360$ day$-$count

convention and evenly spaced periods.

a$.$ Define and explain the significance of the

discount margin for an FRN$.$

b$.$ Calculate the discount margin for the FRN

described above. Show your work.