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3) IBM and AT&T decide to swap $1 million loans. IBM currently pays 9.0% fixed and AT&T pays 8.5% on a LIBOR + 0.5% loan.

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3) IBM and AT&T decide to swap $1 million loans. IBM currently pays 9.0% fixed and AT&T pays 8.5% on a LIBOR + 0.5% loan. What is the net cash flow for IBM ifthey swap their fixed loan for a LIBOR + 0.5% loan and LIBOR rises to 8.5%? A)-$50,000 B) $50,000 C)-$90,000 D) 0

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