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Refer to the following information. A company buys an interest rate cap that pays the difference between LIBOR and 8% if LIBOR exceeds 8%. Current LIBOR is 7%. The amount of the option is €2 500 000 and the settlement is every 6 months. Assume a 360 day year.
Find the payoff if LIBOR closes at 8.2%.
Voltage Across
The potential difference in electric potential between two points in an electrical circuit.
Voltage Polarity
The polarity of the voltage at a particular point in a circuit. Generally of concern in direct current circuits.
Current Flow
The flow of electric charge carriers like electrons through a conductor or space.
Power Dissipation
The conversion of electrical energy into heat in various components of a circuit, often leading to energy loss.
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