INVESTMENTS: FIXED INCOME ANALYSIS
INV3702
ASSIGNMENT 01 SEMESTER 012021
Work through lessons 1 to 4; then answer the following questions. Submit your assignment
via myUnisa.
Question 1
Consider a R1 million semi-annual pay floating-rate issue, where the rate is reset on 1
January and 1 July each year. The reference rate is 6-month LIBOR and the stated margin
+1.25%. If 6-month LIBOR is 6.5% on 1 July, what will the next semi-annual coupon on this
issue be?
[1] R38 750
[2] R65 000
[3] R77 500
Floating Rate Notes
Coupon = Reference rate + quoted margin
=6.5% +1.25%
= 7.75%
Semi annual coupon = [7.75% x R1 000 000]/2
=R38 750
INV3702
ASSIGNMENT 01 SEMESTER 012021
Work through lessons 1 to 4; then answer the following questions. Submit your assignment
via myUnisa.
Question 1
Consider a R1 million semi-annual pay floating-rate issue, where the rate is reset on 1
January and 1 July each year. The reference rate is 6-month LIBOR and the stated margin
+1.25%. If 6-month LIBOR is 6.5% on 1 July, what will the next semi-annual coupon on this
issue be?
[1] R38 750
[2] R65 000
[3] R77 500
Floating Rate Notes
Coupon = Reference rate + quoted margin
=6.5% +1.25%
= 7.75%
Semi annual coupon = [7.75% x R1 000 000]/2
=R38 750
