INTEREST RATE SWAPS PRACTICE PROBLEMS 1. You are given the following information: B Fixed 5.000% 5.500% 0.500% Floating LIBOR+ 0.000% LIBOR+ 0,200% 0.200% asd 5.000% 5.300% 0.300% A preferred LIBOR+ 0.000% preferred 5.500% A not preferred 5.000% B not preferred LIBOR+ 0.200% Swap bank x 5.100% LIBOR y 5.200% LIBOR LIBOR in 1 LIBOR int-2 LIBOR in t-3 3.00% 4.00% 5.00% Notional size $ 40,000,000.00 Show all the transactions from year 0 to year 3 and compute the annual savings for Firm A and firm B. Further, compute the annual profits for the swap bank. INTEREST RATE SWAPS PRACTICE PROBLEMS 1. You are given the following information: B Fixed 5.000% 5.500% 0.500% Floating LIBOR+ 0.000% LIBOR+ 0,200% 0.200% asd 5.000% 5.300% 0.300% A preferred LIBOR+ 0.000% preferred 5.500% A not preferred 5.000% B not preferred LIBOR+ 0.200% Swap bank x 5.100% LIBOR y 5.200% LIBOR LIBOR in 1 LIBOR int-2 LIBOR in t-3 3.00% 4.00% 5.00% Notional size $ 40,000,000.00 Show all the transactions from year 0 to year 3 and compute the annual savings for Firm A and firm B. Further, compute the annual profits for the swap bank