lestion 5 Investment Companies X and Y have been offered the following investment rates per annum: Fixed Rate Floating Rate Company X 8.50% Libor + 0.20% Company Y 10.10% Libor + 0.40% Company X requires a fixed rate investment; Company Y requires a floating rate investment. a) How much total benefit (% p.a.) can be extracted from the swap based on the interest rates listed in the table? b) If the bank, acting as intermediary receives 0.2% per annum, calculate the distribution of the remaining benefits if each company receives 50% of the remaining benefit. What effective investment rate does each company receive? c) Draw a diagram showing the flow of funds. As part of the arrangement, Company X pays LIBOR to the bank and the bank pays LIBOR to Company Y.