Question
Two firms each need $100 million in funds and go to the market for quotes. They are quoted: for C fixed: 5.2%; floating: BBSW plus
Two firms each need $100 million in funds and go to the market for quotes. They are quoted: for C fixed: 5.2%; floating: BBSW plus 1.6%; for D fixed: 3.4%; floating: BBSW plus 1.0%. If D accepts the fixed-rate funds and C the floating-rate funds, they both decide they can reduce their cost of funds through a swap. Structure a swap where C gets 60% of the gain and D gets 40% of the gain.
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Finance For Nonfinancial Managers Beginners Handbook For Finance
Authors: Murugesan Ramaswamy
1st Edition
1516973801, 978-1516973804
