QUESTION 7 BOA Issues $200m in CMO. 40% of the issue is floater tranche with index LIBOR currently 1.5%) and margin 2% The remaining 6O% is inverse floater tranche that is designed to keep the total cost of financing constant. The next year LBOR goes up to 3%. What would be the interest paid to the invese foater tranche investors? Enter your answer in percent, but without percent sign O a5% O45% O 25% O 15% O OS%

QUESTION 7 BOA Issues $200m in CMO. 40% of the issue is floater tranche with index LIBOR currently 1.5%) and margin 2% The remaining 6O% is inverse floater tranche that is designed to keep the total cost of financing constant. The next year LBOR goes up to 3%. What would be the interest paid to the invese foater tranche investors? Enter your answer in percent, but without percent sign O a5% O45% O 25% O 15% O OS%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter11: The Cost Of Capital

Section: Chapter Questions

Problem 1PROB

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