Exhibit 23.8 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 87

Multiple Choice

Exhibit 23.8
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
An international investment firm buys an interest rate cap that pays the difference between LIBOR and 6% if LIBOR exceeds 6%. Current LIBOR is 5%. The amount of the option is $1,500,000, and the settlement is every 3 months. Assume a 360 day year.
-Refer to Exhibit 23.8. Find the payoff if LIBOR closes at 4.7%.

• A)-$45,000
• B)-$11,250
• C)$0
• D)$11,250
• E)$45,000

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Definitions:

Extraverted

A personality trait marked by an orientation of one's interests and energies toward the outer world of people and social interactions rather than the inner world of subjective experience.

Organizational Citizenship Behaviour

A concept referring to voluntary behaviors employees perform to help others and benefit the organization, beyond their normal job duties.

Grapevine

An organization’s informal communication network.

Information Filtering

The process of screening and selecting relevant information from a large volume of data or choices, often using algorithms or manual criteria.