A company has a three-year US dollar-denominated loan at six-month LIBOR plus 1/2% p.a. The three-year fixed-floating

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A company has a three-year US dollar-denominated loan at six-month LIBOR plus 1/2% p.a. The three-year fixed-floating interest rate swap is quoted at 0.70–0.80 and the yield on the three-year treasury note is 3.50%. Determine the total fixed rate interest rate expenses to be paid on the loan if the company engages in an interest rate swap.

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