The US and Euro-Zone Day-Count Convention for a Floating-Rate Note

question 8

Multiple Choice

The US and euro-zone day-count convention for a floating-rate note (based on Libor and Euribor, respectively) is

• A) Actual/365.
• B) Actual/360.
• C) Actual/Actual.
• D) 30/360.

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Definitions:

Expansion

The process by which a company grows in size, scope, or production capacity, often through increased output or market presence.

Products

Goods or services offered by a company to customers in the marketplace.

Crossover Rate

The rate of return at which two projects have the same net present value; used in capital budgeting to evaluate the desirability of investments or projects.

WACC

A measure of a firm's blended cost of capital across all sources, including equity and debt.