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4. Show work. A bank buys an interest rate floor in conjunction with a loan it holds that will make four semiannual payments starting six
4. Show work. A bank buys an interest rate floor in conjunction with a loan it holds that will make four semiannual payments starting six months from now. The floor has a strike of 9 percent. LIBOR at the beginning of the four payment periods is 10, 11, 8, and 8.6 percent. On which dates will the floor writer make a payment to the bank?
a. now and in 24 months
b. in 18 and 24 months
c. in 12 and 18 months
d. in 6, 12, 18 and 24 months
e. none of the above
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