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Boeing has entered into a 10 year interest rate swap with Bank America with a notional principal of $500 million. Boeing has agreed to pay
Boeing has entered into a 10 year interest rate swap with Bank America with a notional principal of $500 million. Boeing has agreed to pay LIBOR the floating rate side of the swap. Bank America has agreed to pay a fixed rate of 7%. Assume that next year, LIBOR is 7.75%. The net payment at that date will be:
A.) Boeing pays Bank America $503,750,000
B.) Boeing pays Bank America $3,750,000
C.) Bank America pays Boeing $25,000,000
D.) Bank America pays Boeing $2,500,000
E.) Boeing pays Bank America $2,500,000
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