The Six-Month LIBOR Rate for a Reference Period Is 10

Multiple Choice

The six-month LIBOR rate for a reference period is 10% (annualized) .The fixed six-month coupon rate for the same period is 5%.Compute the payment to the floating-rate payer if the notional principal is $100 million.

A) $0.5 million
B) $1 million
C) $0 million
D) $1.5 million
E) $0.25 million