32 XYZ company has entered into a plain vanila interest rate swap on $1,000,000 notional principal XYZ company pays a fixed rate of 8 on payments that occur at 90 day intervals Six payments remain with the next one due in exactly 90 days On the other side of the swap, XYZ company receives payments based on the LIBOR rate Describe the transaction that occurs between XYZ company and the dealer at the end of the first period if the appropriate LIBOR rate is 8 8 A) XYZ company receives $2,000 B) Dealer receives $2,000 C) Dealer pays XYZ company $20,000 33 Consider a swap with a notional principal of $100 million IBOR Counterparty Counterparty 8 Fixed LIBOR 9 UBOR 10

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32  XYZ company has entered into a  plain vanila  interest rate swap on $1,000,000 notional principal  XYZ company pays a fixed rate of 8  on payments that occur at 90 day intervals  Six payments remain with the next one due in exactly 90 days  On the other side of the swap, XYZ company receives payments based on the LIBOR rate  Describe the transaction that occurs between XYZ company and the dealer at the end of the first period if the appropriate LIBOR rate is 8 8   A) XYZ company receives $2,000 B) Dealer receives $2,000  C) Dealer pays XYZ company $20,000  33  Consider a swap with a notional principal of $100 million IBOR Counterparty Counterparty 8  Fixed LIBOR   9  UBOR 10

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32. XYZ company has entered into a plain-vanila interest rate swap on $1,000,000 notional principal. XYZ company pays a fixed rate of 8% on payments

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