In a Floor with Semiannual Reset Dates, the Floor Rate

question 6

Multiple Choice

In a floor with semiannual reset dates, the floor rate is 3.5% per annum and the notional principal is $1 million. Suppose that the LIBOR rate is 3% per annum for a particular 6-month period. What is the approximate payoff at the end of the 6 months?

• A) $10,000
• B) $5,000
• C) $2,500
• D) $1,250

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Definitions:

Racial Stereotypes

Generalizations or assumptions about the characteristics, attributes, and behaviors of members of a certain racial group.

Disagreement

A condition or situation in which there is a lack of consensus or approval between two or more parties.

Conflict

A situation or process in which there is a struggle between opposing forces or interests, often resulting in physical or emotional tension.

Self-serving Bias

A cognitive bias that involves interpreting situations in a way that benefits oneself or assigning blame to external factors for personal failures and challenges.