Considering a floating rate note with the following characteristics: 1) face value of$100,000 2) 1year and 3

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Considering a floating rate note with the following characteristics:

1) face value of$100,000

2) 1year and 3 months to maturity

3) coupon paid semi-annually

4) Reference rate is 6 months SHIBOR

5) The next reset date is in 2 months.

6) The 6 month SHIBOR rate at the last reset date was 3.5% per annum (assuming 360 days per year)

7) Today’s2-month SHIBOR rate is 3.6% per annum. What is the value of this floating rate note?

Related Book For answer-question

Understanding Financial Accounting

ISBN: 978-1118849385

1st Canadian Edition

Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald

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Posted Date: Jun 20, 2023 02:48 AM

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Considering a floating rate note with the following characteristics: 1) face value of$100,000 2) 1year and 3

Question:

Expert Answer:

To calculate the value of the floating rate note we need to determine the cash flows based on the co... View the full answer

Understanding Financial Accounting

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