A swap agreement covers a 5-year period and involves annual interest payments on a $1 million principal
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A swap agreement covers a 5-year period and involves annual interest payments on a $1 million principal amount. Party A agrees to pay a fixed rate of 12 percent to party B. In return, party B agrees to pay a floating rate of LIBOR + 3 percent to party A. The LIBOR is 10 percent at the time of the first payment. What is the difference (the net payment)
between the two interest obligations?
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Related Book For
Global Corporate Finance Text And Cases
ISBN: 9781405119900
6th Edition
Authors: Suk H. Kim, Seung H. Kim
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