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Design an IRS - interest rate swap that can create comparative advantages for each firm. Assume the broker of this IRS commission fee = 20bps
Design an IRS - interest rate swap that can create comparative advantages for each firm. Assume the broker of this IRS commission fee = 20bps
Firm A borrows @ | Firm B borrows @ |
Fix rate: current cash rate + 100bps | Fix rate: current cash rate + 180bps |
Floating rate: LIBOR + 150bps | Floating rate: LIBOR + 300bps |
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