Consider a floating rate issue that has a

问题单项选择题

Consider a floating rate issue that has a coupon rate that is reset on January 1 of each year. The coupon rate is defined as one-year London Inter-bank Offered Rate (LIBOR) + 125 basis points and the coupons are paid semi-annually. If the one-year LIBOR is 6.5 percent on January 1, which of the following is the semi-annual coupon payment received by the holder of the issue in that year（）

A. 3.250%.

B. 6.500%.

C. 3.875%.

答案

参考答案：C

解析：

This value is computed as follows: Semi-annual coupon=(LIBOR+125 basis points)/2=3.875%.