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Companies X and Y have been offered the following rates per annum on a 100 million 3-year loan: - Company X requires a floating-rate loan

image text in transcribed Companies X and Y have been offered the following rates per annum on a 100 million 3-year loan: - Company X requires a floating-rate loan and Company Y requires a fixed-rate loan. Design a swap that will net a bank, acting as an intermediary, 0.2% per annum and that will appear equally attractive to both companies. Illustrate the arrangement through a simple graph and provide the rationale for this swap. Companies X and Y have been offered the following rates per annum on a 100 million 3-year loan: - Company X requires a floating-rate loan and Company Y requires a fixed-rate loan. Design a swap that will net a bank, acting as an intermediary, 0.2% per annum and that will appear equally attractive to both companies. Illustrate the arrangement through a simple graph and provide the rationale for this swap

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