1. Company A and Company B have been quoted the following rates:

Company A fixed 5.65% or floating LIBOR + 165 basis points

Company B fixed 4.40% or floating LIBOR + 80 basis points

a. Design a swap that will produce a net gain of 20 basis points per annum for each of the two companies.

b. Design a swap that will produce a net gain of 15 basis points per annum for Company A and a net gain of 25 basis points per annum for Company B.

c. Design a swap that will produce a net gain of 17 basis points per annum for each of the two companies and a 6 basis point fee for an intermediary.