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Homework answers / question archive / Companies X and Y have been offered the following rates per annum on a $5 million 10year investment: Fixed Rate Floating Company X 8% LIBOR+0
Companies X and Y have been offered the following rates per annum on a $5 million 10year investment:
Fixed Rate 
Floating 

Company X 
8% 
LIBOR+0.3% 
Company Y 
8.8% 
LIBOR 
Company X requires a floatingrate investment; company Y requires a fixedrate investment. Design a swap that will net a bank, acting as intermediary, 0.1% per annum and will appear equally attractive to X and Y. (Make all the floating interests equal to the Libor rate).
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