Question
Capital One Bank enters into a $10,000,000 quarterlypay plainvanilla interest rate swap as the fixedrate payer at a swap rate of 6% based on a
Capital One Bank enters into a $10,000,000 quarterlypay plainvanilla interest rate swap as the fixedrate payer at a swap rate of 6% based on a 360day year. The floatingrate payer, First Bank, agrees to make payments at 90day LIBOR plus a 0.6% margin. The 90day LIBOR rate currently stands at 4%. LIBOR90 rates are as follows: 90 days from today = 4.5% 180 days from today = 5.1% 270 days from today = 5.6% 360 days from today = 6.0% After 270 days, Capital One Bank will most likely:
Group of answer choices
Pay $7,500. Receive $22,500. Receive $5,000.
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