Question
Using the following Data for a Floor agreement: XYZ Co. buys a Floor Agreement from Widget Co. The Strike is 6% on the Russell
Using the following Data for a "Floor" agreement: XYZ Co. buys a Floor Agreement from Widget Co. The Strike is 6% on the Russell 2000 Stock Index; Notional Amount is 20 Million dollars; Time: 5 Years; If the Stock Index < 6% at the end of each year, Widget Co. pays XYZ Co; Floor Agree is $300,000 (XYZ Pays Widget Co. this fee); If the Stock Index is 4% at the end of the year what does Widget Co. pay XYZ Co. based on the information?
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Data Communications and Networking
Authors: Behrouz A. Forouzan
5th edition
73376221, 978-0073376226
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