Exhibit 23.1 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 63

Multiple Choice

Exhibit 23.1
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
A company buys an interest rate cap that pays the difference between LIBOR and 8% if LIBOR exceeds 8%. Current LIBOR is 7%. The amount of the option is $2,500,000, and the settlement is every 6 months. Assume a 360 day year.
-Refer to Exhibit 23.1. Find the payoff if LIBOR closes at 8.2%.

• A)$0.00
• B)$25,000.00
• C)$50,000.00
• D)-$25,000.00
• E)-$50,000.00

---

Definitions:

Complexes

Psychological patterns often unconscious, consisting of memories, perceptions, and desires deeply influencing an individual's attitudes and behaviors.

Anticipations

Expectations or preconceived notions about future events or situations, often influencing behavior and perception.

Unrepresentative Sample

Refers to a subset of a population that does not accurately reflect the demographics or characteristics of the whole population.

Rational Image

A coherent and logical mental representation or concept.