The Six-Month LIBOR Rate for a Reference Period Is 10

question 41

Multiple Choice

The six-month LIBOR rate for a reference period is 10% (annualized) .The fixed six-month coupon rate for the same period is 5%.Compute the payment to the floating-rate payer if the notional principal is $100 million.

• A)$0.5 million
• B)$1 million
• C)$0 million
• D)$1.5 million
• E)$0.25 million

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Definitions:

Enforceable Offer

A proposal made in a contract that is legally binding and can be enforced in a court of law, provided it meets all the required conditions.

Restatements of the Law

A set of treatises published by the American Law Institute, articulating the principals of common law in the United States.

CISG

The United Nations Convention on Contracts for the International Sale of Goods, a treaty that establishes a uniform legal framework for international commerce.

Conforming Goods

Products that meet the specifications and standards outlined in a contract of sale.