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| Miller now asks Johnson to compute the payoff of the cap and floor in Table 2 assuming that LIBOR has risen to 7% at expiration. Specifically, Miller wants Johnson to determine the net payoff of the corresponding short collar (buying the floor and selling the cap) for the total outstanding amount of the floating rate bond. Which of the following is the closest to Johnson's answer? A. $300,000. B. −$450,000. C. −$300,000. |