Multiple Choice
Assume a firm has a floating-rate loan and purchases a 10 percent cap on that loan.As a result,the firm will receive payments equal to:
A) .10 × Assets.
B) .10 × Annual interest payment.
C) (LIBOR − .10) × Principal loan amount.
D) (LIBOR + .10) × Principal loan amount.
E) .10 × Principal loan amount.
Correct Answer:
Verified
Correct Answer:
Verified
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