Question
ABC Corp. has a 5-year floating rate note (FRN) with a face value of $50 million and a coupon rate of LIBOR +2% paid semi-annually.
ABC Corp. has a 5-year floating rate note (FRN) with a face value of $50 million and a coupon rate of LIBOR +2% paid semi-annually. It has decided to enter into a costless collar with a ceiling strike rate of 6% and a floor strike rate of 4% to protect against possible increases in interest rates. the notional principal of the collar is $50 million. If the LIBOR rate is currently 4.6%, what is the total cash flow (FRN plus collar) that ABC will have to pay in 6 months? Question 12 options: $1,000,000 $1,650,000 $1,150,000 $1,450,000 $1,300,000
JUST POST ANSWER DONT NEED STEPS (This will be faster and ill give thumbsup)
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