3. Use the following information to set up an interest rate swap between Company A and Company B if A prefers to issue floating rate debt at 3-month LIBOR + 0.125% and B prefers to issue floating rate debt at 6-month LIBOR + 1%. Assume a notional principal of $15,000,000. (Total 4 Marks) Company A Company B | 6-month LIBOR + 1% | 3-month LIBOR + 0.625% 6-month LIBOR + 0.125% 3-month LIBOR + 0.125% What is the quality spread differential? Set up a floating-for-floating rate swap where the swap bank receives 0.125% and the two counterparties share the remaining savings equally. Assume Company A prefers 3 month LIBOR and Company B prefers 6-month LIBOR. (1 Mark) a. b