Suppose that Polestar bank seeks to reduce its interest rate risk in regards to its holdings of fixed-rate (11%) mortgages via the use of interest rate swaps. To this end, Polestar and Emblem bank come to an agreement of a swap arrangement, whereby Emblem receives fixed-rate payments from Polestar's mortgages, equaling 9%. In exchange, Polestar receives variable payments from Emblem, equaling the LBOR rate (the interbank iending rate for Eurobanks). Assume that Polestar's cost of funds (or the rate owed on its deposits) is equal to the LIBOR rate, less 1%. The following table details the swap arrangement from the point of view of Polestar bank for various possible values of LiBOR. Assume that Polestar's cost of funds (or the rate owed on its deposits) is equal to the UBOR rate, less 1%. The following table detalls the swap arrangement from the point of view of Polestar bank for various possible values of LIBOR. spread