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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