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5. Cash Rich Ltd (CRL) has invested 50 crore in market linked securities providing it a current return of 8% with current MIBOR of 7.50lo.

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5. Cash Rich Ltd (CRL) has invested 50 crore in market linked securities providing it a current return of 8% with current MIBOR of 7.50lo. Of late, yield in the market have started falling adversely affecting the income of CRL. It needs to protect the same. Professional Bank Ltd, CRL's banker has offered a 3-year MIBOR based swap with rates at 7.30%-7.40%. Should CRL accept the swap what income can it lock-in for next 3 years? What would be the advantage of the swap? Depict the swap arrangement. 5. Cash Rich Ltd (CRL) has invested 50 crore in market linked securities providing it a current return of 8% with current MIBOR of 7.50lo. Of late, yield in the market have started falling adversely affecting the income of CRL. It needs to protect the same. Professional Bank Ltd, CRL's banker has offered a 3-year MIBOR based swap with rates at 7.30%-7.40%. Should CRL accept the swap what income can it lock-in for next 3 years? What would be the advantage of the swap? Depict the swap arrangement

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