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A financial institution (Bank A) has entered into an interest swap with Bank B on 15 June 2017. Bank A receives 5% per annum and
A financial institution (Bank A) has entered into an interest swap with Bank B on 15 June 2017. Bank A receives 5% per annum and pays six-month every six months. The six-month LIBOR rates during the contract period are given in the following table. Draw the diagram to show the swap contract between Bank A and Bank B. Show the cash flows of financial institution Bank A. Six-Month LIBOR 4.5% per annum 4.4% per annum Date 15 June 2017 15 December 2017 15 June 2018 15 December 2018 15 June 2019 15 December 2019 15 June 2020 5.0% per annum 5.2% per annum 5.4% per annum 5.6% per annum
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