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Interest rates are currently 5%. An FI has purchased a $200 million floor (i.e., put option on interest rates) of 4 percent at a premium

Interest rates are currently 5%. An FI has purchased a $200 million floor (i.e., put option on interest rates) of 4 percent at a premium of 0.7 percent of face value. Rates fall to 3 percent. What is the net financial result (annualised) for the FI at this point?

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