How much rockets national bank received or paid using this


Rockets National Bank sells a three year interest rate cap for a fee of 2 percent of notional principal valued at $50 million, with an interest rate ceiling of 11 percent and LIBOR as the index representing the market interest rate. At the same time, this bank buys a three-year floor(8 percent) for a fee of 1 percent of the $50 million principal. Assumed that LIBOR is expected to be 9 percent, 6 percent, and 12 percent at the end of each of the next three years, respectively. How much Rockets National bank received (or paid) using this strategy?

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Financial Management: How much rockets national bank received or paid using this
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