Companies X and Y have been offered the following rates per annum on a $5 million 10-year
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Companies X and Y have been offered the following rates per annum on a $5 million 10-year investment: Fixed rate Floating rate Company X: Company Y: 8.0% 8.8% LIBOR LIBOR Company X requires a fixed-rate investment; company Y requires a floating-rate invest- ment. Design a swap that will net a bank, acting as intermediary, 0.2% per annum and will appear equally attractive to X and Y.
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Muhammad Salman Alvi
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