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p p O words D Question 8 8 pts Astra has issued an 8% fixed-rate debt security whereas Pfiz has sold bonds paying LIBOR +

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p p O words D Question 8 8 pts Astra has issued an 8% fixed-rate debt security whereas Pfiz has sold bonds paying LIBOR + 1% instead. The companies now would like to offset their risks - Astra is afraid that interest rates will go down and Pfiz is worried that they will go up. Explain how a dealer could set up a swap agreement that meets the goals of both companies and at the same time generates a profit for themselves equal to 0.50% of the notional involved. [8 marks] a Edit View Insert Format Tools Table 12pt v Paragraph BI U AT : 15C 5 8

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