Question: Suppose that coupon reset formulas for a floating-rate bond is 6-month Treasury rate + 250 basis points. Its coupon payment frequency is semi-annual and the

  1. Suppose that coupon reset formulas for a floating-rate bond is 6-month Treasury rate + 250 basis points. Its coupon payment frequency is semi-annual and the par is $1,000. (6 points)

    1. What is the reference rate?

    2. What is the quoted margin?

    3. Suppose that on a coupon reset date that 6-month Treasury rate is 1.8%. What will

      the coupon payment be for the period?

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