A 3 year maturity semiannual floating rate note is priced at 102 50 per 100 par value Its coupon payments are based on LIBOR 100 bps Payment is made semiannually The current LIBOR is 3 a) Calculate the discount margin on this FRN b) What would be the price of the FRN if the discount margin becomes 200 bps

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A 3-year maturity semiannual floating rate note is priced at 102.50 per 100 par value. Its coupon payments are based on LIBOR + 100 bps.

A 3-year maturity semiannual floating rate note is priced at 102.50 per 100 par value. Its coupon payments are based on LIBOR + 100 bps. Payment is made semiannually. The current LIBOR is 3%.

a) Calculate the discount margin on this FRN.

b) What would be the price of the FRN if the discount margin becomes 200 bps?

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