Suppose that the coupon reset formula for a floating-rate bond is: 1-month LIBOR + 220 basis points
Question:
Suppose that the coupon reset formula for a floating-rate bond is: 1-month LIBOR + 220 basis points
a. What is the reference rate?
b. What is the quoted margin?
c. Suppose that on a coupon reset date that 1-month LIBOR is 2.8%. What will the coupon rate be for the period?
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