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 1

percent. Is this swap showing a profit or a loss for the bank