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SXR has an outstanding issue of an inverse floater with face value of $1,000. The coupon...

SXR has an outstanding issue of an inverse floater with face value of $1,000. The coupon payments for the inverse floater is computed using the formula: 10% - 2.5(Three-month LIBOR). What will be the coupon rate and the coupon payment if the three-month LIBOR is: 0%, 0.5%, 1%, 1.25%, 1.5%, 2%, 3.5%, 3.75%, 4%, 4.25%

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Inverse floater will not have negative coupons (Negative coupon arised at LIBOR 4.25%)

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jeff jeffy answered 1 year ago
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