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An insurance company owns $50 million of floating-rate bonds yielding LIBOR plus 1%. These loans are financed with $50 million of fixed-rate guaranteed investment contracts

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An insurance company owns $50 million of floating-rate bonds yielding LIBOR plus 1%. These loans are financed with $50 million of fixed-rate guaranteed investment contracts costing 10%. A finance company has $50 million of auto loans with a fixed rate of 14%. The loans are financed with $50 million in CDs at a variable rate of LIBOR plus 4%. What would be the cash flow goals of each company if they were to enter into a swap agreement? 0.0025 0.005 0.01 0.03 An insurance company owns $50 million of floating-rate bonds yielding LIBOR plus 1%. These loans are financed with $50 million of fixed-rate guaranteed investment contracts costing 10%. A finance company has $50 million of auto loans with a fixed rate of 14%. The loans are financed with $50 million in CDs at a variable rate of LIBOR plus 4%. What would be the cash flow goals of each company if they were to enter into a swap agreement? 0.0025 0.005 0.01 0.03

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