Apple pays floating LIBOR +.25% Receives 5% fixed from Tesla Lets say current LIBOR is 3% Next two years it is 5%, 7% You are Apples bank, design an interest rate swap to hedge Apples interest rate exposure Design 2 different swaps Apple Bonds Also design two swaps for when Apple pays fixed 4% and receives LIBOR+2% from Tesla Current LIBOR is 4%. Next year it will be 6%, then 1%