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5. Company A and Company B conclude an interest rate swap agreement The notional value of the swap is $10,000,000. The term of the swap

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5. Company A and Company B conclude an interest rate swap agreement The notional value of the swap is $10,000,000. The term of the swap is 2 years. (10 points) Cash flows are exchanged every 6 months. Company A pays the fixed interest rate of 3% per year. Company B pays the floating rate: 6-month LIBOR PLUS 1%, 6-month LIBOR turns out to be the following 1st 6 months: 2nd 6 months: 3-6 months: 4 6 months: 2.00% per annum 2.25% per annum 1.75% per annum 1.50% per annum Based on this complete this table of the cash flows exchanged from the viewpoint of rate payer: Company A, the fixed- INTEREST-RATE SWAP CASH FLOWS (notional $10,000,000) st 6 mo th 6 mo. 6-month LIBOR Swap floating rate Swap floating rate payment (if you receive this ", if you pay this Swap fixed rate payment (if you receive this+, if you pay this Net cash flow on swap (if you receive this"+", if you pay this

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