Agrawal Telecom is considering issuing $10,000,000 of 6.75% fixed-coupon bonds to finance an expansion. Alternatively, Agrawal could borrow the funds in the Eurodollar market using a series of six-month LIBOR contracts. A swap contract matching the maturity of the 6.75% coupon bonds is available. The swap uses six-month LIBOR as the floating-rate component. Identify the interest rate swap that Agrawal should use to convert the Eurodollar borrowing to the equivalent of issuing fixed-income bonds.

A. Agrawal would use a pay-fixed, receive-floating interest rate swap

B. Agrawal would use a pay-floating, receive-fixed interest rate swap