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FIN333 Bank has funded 10 percent fixed-rate assets with variable-rate liabilities at LIBOR + 2 percent. IBM312 Bank has funded variable-rate assets with fixed-rate liabilities

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FIN333 Bank has funded 10 percent fixed-rate assets with variable-rate liabilities at LIBOR + 2 percent. IBM312 Bank has funded variable-rate assets with fixed-rate liabilities at 6 percent. The bank's variable-rate assets earn LIBOR + 1 percent. Both banks have reached agreement on an interest-rate swap with the fixed-rate swap payment at 7 percent and the variable-rate swap payment at LIBOR. What will be the net after-swap cost of funds for the FIN333 Bank? Variable-rate at LIBOR + 1 percent. Fixed-rate at 9 percent. o Variable-rate at LIBOR - 1 percent Fixed-rate at 7 percent. Fixed-rate at 8 percent

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