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Company XYZ is thinking about getting into a 7% fixed rate loan. Right now, it could borrow money from Eurodollar market using 6-month LIBOR contract.

Company XYZ is thinking about getting into a 7% fixed rate loan. Right now, it could borrow money from Eurodollar market using 6-month LIBOR contract. There is a swap contract that matches the fixed-coupon bon and LIBOR well. What should company XYZ do in order to convert the Eurodollar borrowing into a fixed-pay bond?

A.)Entering a swap that pays fixed and receive-floating LIBOR

B.) Entering a swap that pay floating LIBOR and receive fixed rate

C.) Entering a swap that pay fixed and receive another floating rate

D.) Entering a swap that pay fixed and receive another fixed

E.) None of above

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