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Two companies, Company A and Company B , are looking to enter into an interest rate swap agreement. Fixed rateFloating RateCompany A 5 % 3

Two companies, Company A and Company B, are looking to enter into an interest rate swap agreement. Fixed rateFloating RateCompany A5%3-month LIBOR plus 1%Company B6%3-month LIBOR plus 1.5%Suppose that company A requires a floating-rate borrowing and company B requires a fixed-rating borrowing. A financial institution is planning to arrange a swap and requires 20bps spread. If benefits are equally shared both companies, what rate of interest will A and B pay?

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