The following are the available rates at which two companies ABC Limited and XYZ limited can invest in Rupee and US Dollars

Fixed Rate (Rs) Fixed Rate (USD)

ABC 9% 5%

XYZ 6% 4%

ABC wants to invest their money in USD and XYZ wants to invest in Rupee for the next 5 years. Design a Swap with the help of an Intermediary so that the Intermediary gets a net gain of 50 basis points and remaining benefit to be split between ABC and XYZ in the ratio 1:1 respectively. Assume exchange rate risk in two currencies to be taken by intermediary. Determine the cashflows which are exchanged for each of the 5 years.