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Company BBB has issued $100 000 of fixed-interest securities for 3 years at an interest rate of 10% per annum. The company signs an interest rate swap agreement with Bank AA on 1 January 2016. At the inception of the agreement the variable interest rate is 8%. BBB prepares its financial statements on 31 December. Fixed rate Variable rate 31 December 2016 11% 10% 31 December 2017 10% 9% 31 December 2018 1 1% 12%