What are the risks in a FRA if you are the buyer? Answer the following questions: a.
Question:
Answer the following questions:
a. When will the buyer of a five year cap on three- month LIBOR with a 1 percent strike rate expect to receive cash? What is the cap premium?
b. When will the buyer of a two year floor on three- month LIBOR with a 0.25 per-cent strike rate expect to receive cash? What is the floor premium?
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a The buyer of a 5year cap on 3month LIBOR will receive cash fro...View the full answer
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