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A firm can issue one of the listed products and convert them into the floating rate using IR swaps (LIBOR for 3.7% fixed). What is
A firm can issue one of the listed products and convert them into the floating rate using IR swaps (LIBOR for 3.7% fixed). What is the lowest floating rate that the firm can get?
Fixed rate note: 4%
Simple FRN: L + 0.5%
Inverse floater: 7.6% - L
Question 6 options:
| L + 0.1% |
| L + 0.2% |
| L + 0.3% |
| L + 0.5% |
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