A: Determine terms that a dealer could offer to earn 25bp and save Bank A 75bp and Company B 25bp.

B. Determine swap terms directly between A and B (no swap dealer) that would provide A with 65bp in savings and B 60bp in savings.

2. The borrowing opportunities of the two firms are: Company B Bank A Fixed rate 11.75% 10% Floating rate LIBOR +.5% LIBOR 2. The borrowing opportunities of the two firms are: Company B Bank A Fixed rate 11.75% 10% Floating rate LIBOR +.5% LIBOR