(Top Glove and Sime Darby are two large Bursa Malaysia listed companies. Both companies are in the process of sourcing a RM 50 million loan. Working for a local investment bank, Maybank, your boss has asked you to design an Interest Rate Swap (IRS) that your bank can sell to the two parties while acting as intermediary. You have been provided the following information.)

	Top Glove	Sime Darby
Jumlah (Amount)	RM50 million	RM50 million
Tempoh (Tenure)	5 or 6 years	6 years
Keutamaan (Preference)	Floating	Fixed
Sebutan kadar trapung (Quoted floating rate)	6-month KLIBOR + 1.2%	6-month KLIBOR
Sebutan kadar tetap (Quoted fixed rate)	8.25%	7.45%

i- (Prove that there is an arbitrage opportunity.)

ii- (Assume that company who has absolute advantage in both market will get the big portion of the mispricing differential with ratio of 2:1:1. With your bank as intermediary, you are asked to design an interest rate swap and assuming a 6-year tenure. (Show the figure and all cash flows clearly.))

iii- (Show the numerical breakdown of the gains to each party.)

please answer this as soon as possible. thank you