1. Table 01 provides the interest rate swap information for the Quality Co. and Risky Co. Their interest rate swap arrangement is illustrated in the following Exhibit 0 Calculate the value of E in Exhibit 0 (enter 2 decimal number without sign and symbol) The correct answer is: 9.17

   Table 01
   Company name	Fixed-rate bond	Floating-rate bond
   Quality Co.	A= 8.07%	B = LIBOR + 0.61%
   Risky Co.	C = 11.14%	D = LIBOR + 1.48%

   

Exhibit 01 Variable rate payments at B Quality Co. Risky Co. Fixed rate payments at E Fixed rate Variable rate payments at D payments at A Fixed rate bond issued Variable bond rate issued Exhibit 01 Variable rate payments at B Quality Co. Risky Co. Fixed rate payments at E Fixed rate Variable rate payments at D payments at A Fixed rate bond issued Variable bond rate issued