Multiple Choice
A ten-year floating-rate note (FRN) has coupons referenced to 3-month pound LIBOR,and pays coupon interest quarterly.Assume that the current 3-month LIBOR is 4 percent.If the risk premium above LIBOR that the issuer must pay is 1/8 percent,the next period's coupon payment on a £1,000 face value FRN will be
A) £31.25.
B) £82.50.
C) £165.00.
D) £41.25.
Correct Answer:
Verified
Correct Answer:
Verified
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