# 5 . A year ago a bank entered into a $50 million 5 - year interest - rate swap . It agreed to pay company A each year a fixed rate of 6 percent and to receive in return LIBOR plus 1 percent When the bank entered into this swap , LIBOR was 5 percent . Interest rates have risen , so on a 4 year interest - rate swap the bank could now expect to pay 6.5 percent and receive LIBOR plus I percent . Is this swap showing a profit or a loss for the bank