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Nike and Adidas borrow money to expand operations. They both borrow $10 million Nike's terms are LIBOR +1% to the lender. Adidas' terms are 9%

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Nike and Adidas borrow money to expand operations. They both borrow $10 million Nike's terms are LIBOR +1% to the lender. Adidas' terms are 9% fixed. The quoted LIBOR for each quarter was: Q1= 4% Q2= 5% Q3-7% Q4-3% The companies enter a swap with the following terms: Nike will pay Adidas 8% fixed and Adidas will pay Nike LIBOR +2%. For Q4, how much did Adidas pay out for that quarter only)? $600,000 $500,000 $800,000 $900.000

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