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An Fl has purchased a $208 million cap of 9 percent at a premium of 0.65 percent of face value. A $208 million floor of

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An Fl has purchased a $208 million cap of 9 percent at a premium of 0.65 percent of face value. A $208 million floor of 4.8 percent is also available at a premium of 70 percent of face value. a. If interest rates rise to 10 percent, what is the amount received by the FI? What are the net savings after deducting the premium? b. If the Fl also purchases a floor, what are the net savings if interest rates rise to 11 percent? What are the net savings if interest rates fall to 3.8 percent? (Negative amounts should be indicated by a minus sign.) c. If, instead, the Fl sells (writes) the floor, what are the net savings if interest rates rise to 11 percent? What if they fall to 3.8 percent? (Negative amounts should be indicated by a minus sign.) Amount received Net savings Net savings if interest rates rise to 11 percent Net savings if interest rates fall to 3.8 percent c. Net savings if interest rates rise to 11 percent Net savings if they fall to 3.8 percent

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