Hello tutor please given correct answer financial accounting A regional bank negotiates the purchase of a one-year interestrate cap with a cap rate of 5.45 percent with a large bank. Theoption has a notional principal of $2 million and costs $3,400.In one year, interest rates are 6.33 percent. The regionalbank's net profit, ignoring commissions and taxes, was:a. $105,600b. $18,400c. $17,600d. $14,200e. $11,500

Step 1: Define Net ProfitNet profit or net income is the difference between expenses and revenue.…

Answered: A regional bank negotiates the purchase…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 30P

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A local credit union negotiates the purchase of a one-year interest rate cap with a cap rate of 4.75 percent with a national bank. The option has a notional principal of 1.5million and costs 2,800. In one year, interest rates are 5.65 percent. The local credit union's net profit, ignoring commissions and taxes, was_.
A local credit union negotiates the purchase of a one-year interest rate cap with a cap rate of 4.75 percent with a national bank. The option has a notional principal of 1.5million and costs 2,800. In one year, interest rates are 5.65 percent. The local credit union's net profit, ignoring commissions and taxes, was_.answer this
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