Companies A and B have been offered the following rates per annum on a $20 million 5-year loan, and a bank, acting as intermediary, will charge 0.10% per annum (10 basis points) to arrange and manage the swap, which appears equally attractive to A and B.

	Fixed Rate	Floating Rate
Company A	6.0%	LIBOR
Company B	7.2%	LIBOR + 0.50%

Please answer all 5 questions. Thanks.

1. Company A requires a floating-rate loan, and company B requires a fixed-rate loan. What is the economic gain to each firm, net of the bank's fee? (please enter your answers as percentages, for instance answer 9.0 to indicate 9.0%).
2. If Company A pays LIBOR to the bank, and the bank pays LIBOR to Company B, what rate will Company A receive from the bank? (please enter your answers as percentages, for instance answer 9.0 to indicate 9.0%).
3. If Company A pays LIBOR to the bank, and the bank pays LIBOR to Company B, what rate will Company B pay to the bank? (please enter your answers as percentages, for instance answer 9.0 to indicate 9.0%).
4. If Company A pays LIBOR to the bank, and the bank pays LIBOR to Company B, what is the net rate that company A will pay?
5. If Company A pays LIBOR to the bank, and the bank pays LIBOR to Company B, what is the net rate that company B will pay? (please enter your answers as percentages, for instance answer 9.0 to indicate 9.0%).