TABLE 9.1 Use the Information for Polaris Corporation to Answer Following Question(s)

question 45

Multiple Choice

TABLE 9.1
Use the information for Polaris Corporation to answer following question(s) .
Polaris is taking out a $5,000,000 two-year loan at a variable rate of LIBOR plus 1.00%. The LIBOR rate will be reset each year at an agreed upon date. The current LIBOR rate is 4.00% per year. The loan has an upfront fee of 2.00%
-Refer to Table 9.1. What portion of the cost of the loan is at risk of changing?

• A)the LIBOR rate
• B)the spread
• C)the upfront fee
• D)all of the above

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Definitions:

Predominate

To be the strongest or main element; to have a dominating influence.

Major Organic Product

The primary product of an organic reaction that is formed in the greatest yield, determined by the mechanism and conditions of the reaction.

2-Methylheptane

An isomer of octane, a hydrocarbon molecule with a seven-carbon chain and a methyl group attached to the second carbon.

2-Methylhept-1-ene

An organic compound belonging to the class of alkenes, specifically an eight-carbon chain with a double bond at the first position and a methyl group at the second carbon.