Multiple Choice
A five-year Floating-rate note (FRN) has coupons referenced to six-month dollar LIBOR,and pays coupon interest semiannually.Assume that the current six-month LIBOR is 6 percent.If the risk premium above LIBOR that the issuer must pay is 1/8 percent,the next period's coupon rate on a $1,000 face value FRN will be:
A) $29.375.
B) $30.000.
C) $30.625.
D) $61.250.
Correct Answer:
Verified
Correct Answer:
Verified
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