Suppose a bank buys an interest rate cap that has these terms: the cap will last...

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Suppose a bank buys an interest rate cap that has these terms: the cap will last for 5 years; payment is annually, the cap rate is 3%; and the notional amount is $10 million. Suppose that at the end of 1-year period the interest rate is 5%, what is the amount of the payment that the bank will receive? $0.3 million $0.4 million $0.5 million O so $0.2 million Suppose a bank buys an interest rate cap that has these terms: the cap will last for 5 years; payment is annually, the cap rate is 3%; and the notional amount is $10 million. Suppose that at the end of 1-year period the interest rate is 5%, what is the amount of the payment that the bank will receive? $0.3 million $0.4 million $0.5 million O so $0.2 million

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The detailed answer for the above question is provided below ANSWER Option E 02 Million ... View the full answer