USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 96

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
As a relationship officer for a money-center commercial bank, one of your corporate accounts has just approached you about a one-year loan for $3,000,000. The customer would pay a quarterly interest expense based on the prevailing level of LIBOR at the beginning of each quarter. As is the bank's convention on all such loans, the amount of the interest payment would then be paid at the end of the quarterly cycle when the new rate for the next cycle is determined. You observe the following LIBOR yield curve in the cash market:

-Refer to Exhibit 15.3. If 90-day LIBOR rises to the levels "predicted" by the implied forward rates, what will the dollar level of the bank's interest receipt be at the end of the third quarter?

• A) $35,250.00
• B) $36,375.00
• C) $38,250.00
• D) $41,005.50
• E) $0

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Definitions:

Cerebral Hemisphere

Each of the two parts of the brain (left and right) responsible for different functions, with the left typically handling logical reasoning and the right more involved in creative tasks.

Brainstem

The lower part of the brain that connects the cerebrum with the spinal cord and controls vital functions such as breathing and heart rate.

Neurons

Specialized cells transmitting nerve impulses; the basic units of the brain and nervous system.

Glial Cells

Non-neuronal cells in the central and peripheral nervous systems that provide support and protection for neurons.