Question: Suppose that a four-year FRN pays three-month Libor plus 1% on a quarterly basis. Currently, three-month Libor is 2%. The price of the floater is

Suppose that a four-year FRN pays three-month Libor plus 1% on a quarterly basis. Currently, three-month Libor is 2%. The price of the floater is 98 per 100 of par value. What is discount margin?

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