advantage in borrowing at both floating and fixed rate. They have obtained the following quotations for borrowing: A swap dealer quotes a mid-rate of 3.45% p.a. against Libor and pays 5 basis points less than the mid-rate and receives 5 basis points more. the letters A to F on the above diagram. ii) By engaging in this swap, how much will Kim be able to reduce her cost of borrowing below the market alternative for her prefing type? [4+6=10 marks ] advantage in borrowing at both floating and fixed rate. They have obtained the following quotations for borrowing: A swap dealer quotes a mid-rate of 3.45% p.a. against Libor and pays 5 basis points less than the mid-rate and receives 5 basis points more. the letters A to F on the above diagram. ii) By engaging in this swap, how much will Kim be able to reduce her cost of borrowing below the market alternative for her prefing type? [4+6=10 marks ]