SECTION 3.2 SECTION 3.2

6.) Assuming Silva's advice is followed and Libor rates are 5% and 6% on 15 October 2013

and 15 December 2013, respectively, the effective annual interest rate on Short Hills

Corporation's loan is closest to:

A. 3.50%.

B. 5.42%.

C. 4.64%.

Answer = B

"Risk Management Applications of Option Strategies," Don M. Chance