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

Accounting May 20, 2021

Companies X and Y have been offered the following rates per annum on a $5 million 10-year investment:

	Fixed Rate	Floating
Company X	8%	LIBOR+0.3%
Company Y	8.8%	LIBOR

Company X requires a floating-rate investment; company Y requires a fixed-rate 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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