commonly used are spread for life, adjusted simple margin, adjusted total margin, and discount margin. We will illustrate the calculations of these margins with a float- ing-rate note issued by Enron Corp. (ticker symbol "ENE 03/00") that matured March 30, 2000. This issue contained no embedded options. The floater had a coupon formula equal to 3-month LIBOR plus 45 basis points and delivered cash flows quarterly. The Yield Analysis screen (YA) from Bloomberg is presented in Exhibit 7.1. We will illus- trate the calculation of each of the four margin measures in turn.       Spread for Life When a floater is selling at a premium/discount to par, a potential buyer of a floater will consider the premium or discount as an additional source of dollar return. Spread for life (also called simple margin) is a measure of potential return that accounts for the accretion (amortiza- tion) of the discount (premium) as well as the constant index spread over the securitys remaining life. Spread for life is calculated using the following formula:   Spread for life = 100(100- P ) ---------------------------------- Maturity 100 --------- P (3)     where P is the market price (per $100 of par value) and Maturity is in years using the appropriate day count convention. The quoted margin is measured in basis points. To illustrate this calculation, at the time of the analysis the Enron floater had a current coupon of 5.45, matured in 345 days or 0.9583 of a year using an ACT/360. Although there is no current market quote available for this floater as indicated by the words "NOT PRICED" at the top center of the screen, we will use the Bloomberg default price of 99.99 for the current market price P. The simple margin is calculated as follows   Spreadforlife 100(100- 99.99 ) 100 = --------------------------------------------- + 45 0.9583 --------------