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Suppose that a three-year FRN pays a six-month Libor plus 4% semi-annually. Currently, the six-month Libor is 2%. The price of the floater is 90

Suppose that a three-year FRN pays a six-month Libor plus 4% semi-annually. Currently, the six-month Libor is 2%. The price of the floater is 90 per 100 of par value.

What is the discount margin?

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