A US company CTM borrows $1,500,000 at LIBOR + 125bp p.a. on a 6M rollover basis from a London bank. If 6M LIBOR is 4 1/2% over the 1st 6M interval and 5 3/8% over the 2nd 6M interval, how much will CTM pay in interest over the 1st year of its Eurodollar loan?© BrainMass Inc. brainmass.com October 9, 2019, 4:18 pm ad1c9bdddf
125 bp= 1.25% %
interest payment for first half year
Therefore interest ...
The solution calculates Interest on Eurodollar loan borrowed on a 6M rollover basis from a London bank.