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The yield curve on eurodollars is sharply upward sloping

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Reference no: EM13884989

Suppose that the yield curve on Eurodollars is sharply upward sloping.

a. Will premiums on interest rate floors on three month LIBOR be high or low? Explain.

b. Will premiums on interest rate caps on three month LIBOR be high or low? Explain.

Reference no: EM13884989

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