If a fiRm Sells a flOor at 6% This Will

question 50

Multiple Choice

If a firm sells a floor at 6% this will:

• A)pay the holder the LIBOR interest below 6%.
• B)pay the firm 6% on their purchase.
• C)pay the holder the LIBOR interest above 6%.
• D)limit the amount of borrowing to 6% of assets.
• E)None of the above.

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Definitions:

Extreme

Refers to values in a data set that are significantly higher or lower than the majority of the values.

Mild

Describes something that is gentle or not severe in effect or degree.

Contingency Table

A table used in statistics to display the frequency distribution of variables, showing the number of observations for each combination of two categorical variables.

Mutually Exclusive

Two events that cannot both occur at the same time, often referenced in probability and statistics to describe situations where the happening of one event excludes the occurrence of another.