Exhibit 21 -Refer to Exhibit 21

question 64

Multiple Choice

Exhibit 21.3
Use the Information Below for the Following Problem(S)
As a relationship officer for a money-center commercial bank, one of your corporate accounts has just approached you about a one-year loan for $3,000,000. The customer would pay a quarterly interest expense based on the prevailing level of LIBOR at the beginning of each quarter. As is the bank's convention on all such loans, the amount of the interest payment would then be paid at the end of the quarterly cycle when the new rate for the next cycle is determined. You observe the following LIBOR yield curve in the cash market:
$\begin{array}{ll}90 \text {-day LIBOR } & 4.70 \% \\180 \text {-day LIBOR } & 4.85 \% \\\text { 270-day LIBOR } & 5.10 \% \\\text { 360-day LIBOR } & 5.40 \%\end{array}$
-Refer to Exhibit 21.3.If 90-day LIBOR rises to the levels "predicted" by the implied forward rates,what will the dollar level of the bank's interest receipt be at the end of the second quarter?

• A) $40,500.00
• B) $38,250.00
• C) $35,250.00
• D) $37,064.25
• E) None of the above

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Definitions:

Fraud

Consciously tricking someone in order to gain illicitly or to rob a victim of their rightful due.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when entrusted with care of money, property, or confidential information.

Duress

Compulsion, force, or pressure exerted upon a person to coerce them into performing an act against their will or judgment.

Public Policy

Principals and standards considered to be in the interests of the public and used as a guide for lawmaking.