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

question 9

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 6.3%.

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

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Definitions:

AAMR/AAIDD

The American Association on Intellectual and Developmental Disabilities, previously known as the American Association on Mental Retardation, is an organization aimed at enhancing the quality of life for individuals with intellectual and developmental disabilities.

Intellectual Disability

A condition characterized by significant limitations in both intellectual functioning (such as learning, problem-solving, judgment) and in adaptive behavior, which covers a range of everyday social and practical skills, apparent before the age of 18.

Etiological Factors

Causes or contributing factors that lead to the development of a disease or psychological condition.

Autism Spectrum Disorder

Autism Spectrum Disorder is a developmental disorder characterized by difficulties in social interaction, communication, and by restricted and repetitive behavior patterns.