1. 12. Chapter 23 He Suppose that at the present time, one can enter 5-year swaps that exchange LIBOR for 8%. An off-market swap would then be defined as a swap of LIBOR for a ford rate other than 8%. For example, a firm with 11% coupon debt outstanding might like to convert to synthetic floating-rate debt by entering a swap in which it pays LIBOR and receives a ford rate of 17%. What up front payment will be required to induce a counterparty to take the other side of this swap? Assume notional principal is $20 million. Do not round Intermediate calculations. Round your final answer to the nearest dollar amount) Upfront

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