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(Swap Motivation) National Bank has a $200b of Adjustable Rate Mortgage (ARM) as assets on its balance sheet. The interest rate on the ARM is

(Swap Motivation) National Bank has a $200b of Adjustable Rate Mortgage (ARM) as assets on its balance sheet. The interest rate on the ARM is 3%+Libor. As a result, the bank will receive floating interest. The bank is considering hedging the risk in the interest income from the assets with a three-year interest rate swap. What should be the bank's receipt and payment cash flows in the swap? pay National Bank receive

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