Question 4. [3 marks] Two companies have investments which pay the following rates of interest: Wal is beller hiber Fixed Float 6 % Libor Firm A Libor+0.5 % Firm B 8% hibor tos Assume A prefers a fixed rate and B prefers a floating rate. Show how these two firms can both benefit by entering into a swap agreement. If an intermediary charges both parties equally a 0.1 % fee and any benefits are spread equally between Firm A and Firm B, what rates could A and B receive on their preferred interest rate? (2 marks) Please draw the cash flow chart. (1 marks)