Question: Suppose that the coupon reset formula for a floating-rate bond is: 1-month LIBOR + 240 basis points. Suppose that on a coupon reset date that

Suppose that the coupon reset formula for a floating-rate bond is:

Suppose that the coupon reset formula for a floating-rate bond is: 1-month LIBOR + 240 basis points. Suppose that on a coupon reset date that 1-month LIBOR is 2.8%. What will the coupon rate be for the period? O 0.4% = 2.8% - 2.4% 5.2% = 2.8% +2.4% 3% = 2.8% + 2.4%/12 (1-month LIBOR) You cannot know this for variable rate securities None of the above

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