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Alpha and Beta Companies can borrow for a five-year term at the following rates: If there is no swap bank involved, and Alpha wants to
Alpha and Beta Companies can borrow for a five-year term at the following rates: If there is no swap bank involved, and Alpha wants to borrow through floating debts and desires 70% of the total benefit from the swap. How much could Alpha save from the swap? In other words, the all-in-cost for Alpha is LIBOR - B\% through the swap, and B is worth 70% of the swap's total benefit (For example, if the total benefit of the swap is 2%, then B=0.72%=1.4%, you enter your answer as " 1.4" )
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