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:

Tone

The general character or attitude of a place, piece of writing, situation, etc., often setting the mood or atmosphere.

Timing

The selection of the most appropriate or opportune moment to perform an action or make a decision, affecting its success or outcome.

Chronemics

The study of how time is perceived, structured, and used in various cultures, and its effect on communication and behavior.

Interpersonal Communication

The process of exchange of information, feelings, and meaning between two or more people through verbal and/or non-verbal methods.