Question 6Question 14A company buys an interest rate floor that pays the difference between 5% and LIBOR if LIBOR is below 5%. Current LIBOR is 5.2%. The notional amount of the option is $2,000,000, and the settlement is every 3 months. Assume a 360 day year. Find the payoff if LIBOR closes at 4%.$0$2,500$1,667$1,000A forward rate agreement (FRA) that expires in 180 days and is based on 90-day LIBOR is quoted at 2.2%. At expiration of the FRA, 90-day LIBOR is 2.8%. For a notional principal of $1,000,000, the payoff of this FRA is closest to:$1,491.80$1,469.31$1,500$1,489.57Question 9An American company agrees to exchange a 5-year, $10M, 9% fixed-rate loan to a swap bank for a 6%, five-year Euro 25M loan, and a German company agrees to exchange a five-year, Euro 25M, 6.5% fixed-rate loan to a swap bank for a five-year, $10M, 9.5% loan. Each year the American company would pay ____.$0.90M for Euro 1.5M$0.95M for Euro 1.5MEuro 1.625M for $0.90MEuro 1.5M for $0.95M
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