Companies Xucorp and Yultd have been offered the following rates per annum on a

$$10$ million five$-$year loan:

Xucorp requires a floating$-$rate loan while Yultd requires a fixed$-$rate loan.

Identify and explain the comparative advantage in this situation.

Design a swap that will net a bank, acting as intermediary, $0\mathrm{.}04\%$ per annum and that

will appear equally attractive to both companies.

$(10$ marks$)$