Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
The loan called for a floating rate that was 26 basis points (.26 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.24 percent and a minimum of 1.76 percent. Calculate the rate of interest for weeks 2 through 10.
| Date | LIBOR |
| Week 1 | 1.94% |
| Week 2 | 1.66% |
| Week 3 | 1.54% |
| Week 4 | 1.39% |
| Week 5 | 1.63% |
| Week 6 | 1.61% |
| Week 7 | 1.73% |
| Week 8 | 1.93% |
| Week 9 | 1.93% |
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