Find the Yield to Maturity for This Floating Rate Note

question 62

Multiple Choice

Find the yield to maturity for this floating rate note: The reset date is today; coupons are paid annually according to the formula (LIBOR + ¼ percent) ; since issuance, there has not been a change in the issuer's credit rating. The bond has ten years to maturity and LIBOR = 3.5 percent.

• A)3.5%
• B)4%
• C)3.75%
• D)There is not enough information provided to make a determination.

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