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Companies X and Y have been offered the following rates per annum on a $5 million 10-year investment: Fixed RateFloating rate Company X:8.0%LIBOR Company Y:8.8%LIBOR

Companies X and Y have been offered the following rates per annum on a $5 million 10-year investment:

Fixed RateFloating rate

Company X:8.0%LIBOR

Company Y:8.8%LIBOR

Company X requires a fixed-rate investment; company Y requires a floating rate investment. Design a swap that will net a bank, acting as intermediary, 0.2% per annum and will appear equally attractive to X and Y.

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