1. ABC and XYZ enter into a $10 million 2-year interest rate swap.

ABC will pay XYZ a 3.5% (annualized) fixed rate twice a year and in return XYZ agrees to pay Microsoft the 6-month LIBOR rate twice a year.

The agreement is initiated on October 31, 2020

Show the cash flows for both ABC and XYZ based on the following LIBOR rates

April 30, 2021 LIBOR = 3.00%

October 31, 2021 LIBOR = 3.25%

April 30, 2022 LIBOR = 4.25%

October 31, 2022 LIBOR = 3.75%