Exhibit 15-1 Lizard National Bank Purchases a Three-Year Interest Rate Cap for Cap

Exhibit 15-1
Lizard National Bank purchases 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.Assume that LIBOR is expected to be 9 percent, 12 percent, and 13 percent at the end of each of the next three years, respectively.
-Refer to Exhibit 15-1.The total payments received (or paid) by Lizard, including the initial fee, are $____.

A) 500,000
B) 500,000
C) 1,500,000
D) 1,500,000
E) none of the above