A Thrift Purchases a One-Year Interest Rate Floor with a Floor

question 57

Multiple Choice

A thrift purchases a one-year interest rate floor with a floor rate of 4.23 percent from a large bank. The option has a notional principal of $1 million and costs $2,000. If in one year,interest rates are 3 percent,the thrift's net profit,ignoring commissions and taxes,was _____ ; and if in one year,interest rates were 2 percent,the thrift's net profit was _____.

• A)$0; $7,500
• B)$8,800; -$2,000
• C)$8,800; $0
• D)$29,500; -$2,000
• E)$29,500; $0

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Shutter Bar Open/Close

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Navigation Pane

A feature in software applications that allows users to easily locate and manage different elements of a document or database, providing quick access to specific sections.

Navigation Pane

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Rename

The action of changing the name of a file, folder, or other object in a computer system to something else.