A one-year floating-rate note pays 6-month Libor plus 90 bps. The floater is priced at 98.67 per 100 of par value. Current 6-month Libor is 1.17%. Assume a 30/360 day-count convention and evenly spaced periods. What is the annual discount margin for the floater in basis points?

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A: As per the information provided:  N = 48 R = 8% To determine: We have to estimate the annual…

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A: Effective annual rate is the rate that is actually earned. It can be calculated Effective annual…

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Q: pays a 9.75% nominal rate on deposits, with monthly compounding. What effective annual rate (EFF%)…

A: The effective annual rate can be computed as follows :- EAR = (1+i / x)^x - 1  = (1 + 0.0975/12)^12…

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A: The Effective Annual Rate (EAR), also known as the annual equivalent rate (AER) or annual percentage…

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A: Effective annual rate refers to the interest rate that is being charged by the lender to the…

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Q: A loan is offered with monthly payments and a 9.75 percent APR. What's the loan's effective annual…

A: APR = 0.0975n = Number of compounding 12 (i.e. monthly compounding)EAR = ?EAR is annual rate after…

Q: card

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A: Calculate the effective annual rate (EAR) as follows:

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A: Effective annual rate = (1+Monthly interest rate)12-1

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A: Treasury bills are the debt instruments issued by the Government for a short period generally for…

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A: The equivalent discount rate is the interest rate that discounts future cash flows to their present…

Q: A 10-year floating rate (annually paid) security selling for 101.32 pays a rate based on a reference…

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A: 1/15, net 40 means that the supplier will give an additional discount of 1% to the buyer if the…

Q: The monthly effective rate of discount is 0.7% . Calculate the force of interest per annum which is…

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A: Cash discount is one of the type of discount which is given to customers in order to influence them…

Q: ) If you make no payments and no additional purchases for one year, what will be the amount owed at…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

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Q: What is the discount margin? +30.94 bps -309.4 bps -30.94 bps +309.4 bps

A: The discount margin is used to evaluate a floating-rate security's attractiveness by calculating the…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.