The Six Month LIBOR Rate for a Reference Period Is

Multiple Choice

The six month LIBOR rate for a reference period is 6.8% (annualized) .The fixed six-month coupon rate for the same period is 3.9%.Compute the payment to the floating-rate payer if the notional principal is $100 million.

A) $0.5 million
B) $1 million
C) $1.5 million
D) $2 million
E) $2.5 million