Compute the value of a five-year swap where LIBOR is paid in the usual way and in return LIBOR compounded at LIBOR is received on the other side? The principal on both sides is $100 million. Payment dates on the pay side and compounding dates on the receive side are every six months and the LIBOR zero curve is flat at 5% with semi annual compounding (and is used for discounting).

Explain carefully why a bank might choose to discount cash flows on a currency swap at a rate slightly different from LIBOR.