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Two firms each need $2million in funds and go to the market for quotes. They are quoted: for A fixed: 8.3per cent; floating: BBSW plus

  1. Two firms each need $2million in funds and go to the market for quotes. They are quoted: for A fixed: 8.3per cent; floating: BBSW plus 2per cent; for B fixed: 9.4per cent; floating: BBSW plus 2.9per cent. If A accepts the fixed-rate funds and B the floating-rate funds, then they both decide they can reduce their cost of funds through a swap, can you structure a swap where they both benefit equally?

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