for the purchase option an investment bank offered jal the following r
For the purchase option, an Investment Bank offered JAL the following rate lock strategy. JAL can enter into a forward contract with the bank,where if Libor in January 2021 ends up higher than 2%, then the bank pays JAL the difference on $100M notional. The case will be reversed if Libor ends up lower than 2%. 1.If Libor is 2.5% in January 2021, how much does JAL receive or pay to the investment bank in the first year? – 5pts
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