Suppose that a savings and loan association buys an interest-rate cap that has these terms: The reference
Question:
Answer the below questions.
(a) What is the amount of the payment that the savings and loan association will receive?
(b) What would the writer of this cap pay if the 6-month Treasury rate were 5.45% instead of 6.1%?
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a The buyer of a cap benefits if the interest rate rises abov...View the full answer
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