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can you please explain how to draw this diagram please? and how we can tell which side the arrow is indicating please Problem1 Maturity (gears)

can you please explain how to draw this diagram please? and how we can tell which side the arrow is indicating please image text in transcribed
Problem1 Maturity (gears) Rid Offer 6.06 6.24 6.39 6.51 6.68 6.87 Suap rate 6.03 6.2 6.35 6.47 6.65 6.83 6045 6.225 6.370 6.490 6.665 6.850 . 10 The table above shows the interest rate swap rates quoted by Goldman Sachs today. Answer the following questions using data from the table above (a) Currently Gillette is in the loan agreement with its lenders that will last for another 3 years. Under this agreement Gillette pays 6.45% fixed interest per annum. Because Gillette's treasurer believes that the rates would go down over this period, she decides to enter a swap with Goldman Sachs to transform this fixed rate loan into a floating rate oan. Design an interest rate swap between Gillette and Goldman Sachs. Show the swap in the diagram indicating the flow of payments by arrows and interest rates exchanged Gillete will pay Goldman Sachs LIBOR and receive 621% from Goldman Sachs. Note that in this case Goldman Sachs pays fixed so the bid rate must be used for 3 ycar LIBOR 6 45% Goldman Sachs Gillette 621% (b) Calculate the effective interest rate paid by Gillette after the swap in part a is entered Gillete pays to Lenders 6.45% pa Gillete pays Goldman Sachs LIBOR Gil Effective interest rate-LIBOR + (6.45%-621%)-LIBOR + 0.24% rate) from Goldman Sachs

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