[31 Investment banks as traders: Credit Default Swaps (10 points) The table below shows quotes by Credit Suisse for CDS prices for bonds issued by the sovereign governments of Armenia, Georgia and Kazakhstan. The bank is a "market maker" in Credit Default Swaps: it buys and sells protection. JPMorgan has excessive short-term exposure to Armenia and to Georgia, and wants to reduce it through the CDS market. It calls Credit Suisse. Armenia Georgia Kazakhstan 1 year 3.24% / 3.77% 2.27%) 2.46% 0.99% / 1.17% 3 years 4.01% / 4.22% 2.75% / 2.95% 1.23% / 1.46% JP Morgan buys a 20 million one-year protection on Armenia; it also buys 9 million three-year protection on Georgia. In order to make the purchase of this protection cheaper, based on its more ble long-term view on Kazakhstan, JPMorgan decides to sell 25 million three-year protection on Kazakhstan. What is the net annual premium payment made by JPMorgan to Credit Suisse in the first year? 12 points for each cash payment, 4 points for net premium]