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ABC Inc borrows $ 1 , 0 0 0 , 0 0 0 at LIBOR plus a lending margin of 3 percent per annum on

ABC Inc borrows $

1, 000, 000

at LIBOR plus a lending margin of

3

percent per annum on a sixmonth rollover basis from a European bank. The current six

-

month LIBOR is

5

percent. How much ABC Inc will pay in interest over the first

6

months of its Eurodollar loan?

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