What discount margin in basis points

Assignment Help Financial Management

Reference no: EM131619365

A floating rate note (FRN) with exactly two years remaining until maturity offers a coupon rate equal to 3-month Libor + 1.20% (the quoted margin) on a quarterly basis. Currently, 3-month Libor is 2.80%. The FRN is currently priced in the market at a price of 96 (% of par value).

What discount margin, in basis points, is reflected in the FRN’s price?

A 189 bps

B 273 bps

C 334 bps

Reference no: EM131619365

Questions Cloud

Identify the account or accounts to be debited and credited : Identify the account or accounts to be debited and credited and, using the provided template, prepare a journal entry for each in the proper format.

Measured by an observer on the earth : a) How long does the trip take as measured by an observer on the Earth?

Significant figures for expression : Address each of the questions below in your answer. a. Please determine the number of significant figures for each expression.

A bond portfolio contains the following holdings : A bond portfolio contains the following holdings:

What discount margin in basis points : What discount margin, in basis points, is reflected in the FRN’s price?

Complete the statement of cash flow in cash flow statement : Data is provided in the Information worksheet in the template; complete the statement of cash flow in the Cash Flow Statement worksheet.

Estimate the utilization of the trucks : At a small rock quarry, a single power shovel dumps a scoop full of rocks at the loading area approxi-mately every 10 minutes.

Bond yield to maturity decreases : If the bond’s yield to maturity decreases by 100 basis points, the bond’s price is most likely to:

Astronaut flies from the earth to a distant star : An astronaut flies from the Earth to a distant star at 60% of the speed of light. As measured by the astronaut, the one-way trip takes 18 years.

User Account

All Pages