Question
Suppose we wish to borrow $5,000,000 for 91 days at LIBOR beginning next March, and that the quoted Eurodollar futures price (based on a 360-day
Suppose we wish to borrow $5,000,000 for 91 days at LIBOR beginning next March, and that the quoted Eurodollar futures price (based on a 360-day year) is 91.03. How much will be needed to repay the loan?
a.$5,113,371
b. $5,056,498
c. $5,226,742
d. $5,448,500
e. $5,492,695
correct answer b. $5,056,498
Please explain equation and how to solve the question in steps
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
