MegaEvil Corp., run by Dr. Evil, PhD, is feeling pretty uncertain within the current geopolitical environment, as many of MegaEvil's dangerous products, which include "laser sharks" are being banned by governments around the world. To make matters worse, MegaEvil currently has $100 Billion of debt, which Dr. Evil convinced his #2 executive (named "#2") and the board to issue at a variable rate (LIBOR + 200 BPs) as Dr. Evil didn't feel that that interest rates would go up at the time, and LIBOR + 200 BPs was cheaper at the time than fixed-rates MegaEvil could have gotten in the market. However, now rates are rising quickly and #2 is furious at Dr. Evil (but afraid to voice his opinion) as he feels the Fed will continue to raise rates for the next 5 years. The $100 Billion of MegaEvil corp. debt will also mature in 5 years. How should Dr. Evil now hedge out the $100 billion in variable rate debt, and lock in a fixed-rate , if he decides to take #2's advice?

Group of answer choices

Immediately repay the $100 Billion by selling all of MegaEvil's unneeded corporate assets and evil lairs across the world.

Issue $100 billion more of debt at a fixed-rate, with a 5-yr maturity.

Enter a SWAP, with $100 Billion notional principal, to recieve LIBOR + 200 BPs and pay 4%. This SWAP has quarterly SWAP dates and a 5-yr maturity.

Enter a SWAP, with $100 Billion notional principal, to recieve 4% and pay LIBOR + 200 BPs. This SWAP has quarterly SWAP dates and a 5-yr maturity.

Buy more Laser Sharks ASAP.