Company X and Company Y have been offered the following quarterly compounded rates per annum on a 5-year investment with a principal of $10x: X1 = 9 X2 = 3 Company Fixed rate (%) X3 = 9 Floating rate (basis points over LIBOR) 10(x2 + x3) 10x, max(xs, x) Xs = 7 X X +xz x, + max(x3,x) Y Xs = 0 (a) Company X and Company Y wish to use swap to transform their investment incomes from their respective apparent comparative-advantage interest rates market. Design a swap that will net a bank who acts as an intermediary, at 0.05% per annum and that will appear equally attractive to the companies. (9 marks) Company X and Company Y have been offered the following quarterly compounded rates per annum on a 5-year investment with a principal of $10x: X1 = 9 X2 = 3 Company Fixed rate (%) X3 = 9 Floating rate (basis points over LIBOR) 10(x2 + x3) 10x, max(xs, x) Xs = 7 X X +xz x, + max(x3,x) Y Xs = 0 (a) Company X and Company Y wish to use swap to transform their investment incomes from their respective apparent comparative-advantage interest rates market. Design a swap that will net a bank who acts as an intermediary, at 0.05% per annum and that will appear equally attractive to the companies. (9 marks)