A Five-Year Floating-Rate Note Has Coupons Referenced to Six-Month Dollar

question 46

Multiple Choice

A five-year floating-rate note has coupons referenced to six-month dollar LIBOR,and pays coupon interest semiannually.Assume that the current six-month LIBOR is 6 percent.If the risk premium above LIBOR that the issuer must pay is 1/8 percent,the next period's coupon rate on a $1,000 face value FRN will be

• A)$29.375
• B)$30,000
• C)$30.625
• D)$61.250

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Definitions:

Counseling Orientation

The philosophical approach or framework that guides a counselor's methods and interaction with clients.

Morals

Principles or beliefs concerning right and wrong behavior.

Normal Guilt

Refers to the feelings of regret and responsibility one might experience after having done something wrong or failed to do something right; it is considered a healthy psychological mechanism.

Indecisiveness

A difficulty in making decisions, often stemming from fear of making the wrong choice, anxiety, or a lack of confidence.