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A company enters into a short position in a five-year, annual settlement, interest rate swap on LIBOR with a swap fixed rate of 5% per

A company enters into a short position in a five-year, annual settlement, interest rate swap on LIBOR with a swap fixed rate of 5% per year. The notional value of the swap is $100 million and the current LIBOR rate is 4% per year. In one year, what is the company's cash flow under the terms of the swap?

-$1 million.

$1 million.

$0.

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