1. Wall company and Table company need to raise funds for capital improvements at their manufacturing plants.

Wall company can borrow funds either at an 8 percent fixed rate or at SBI+2 percent floating rate. Table company can borrow funds at the debt market either at a 11 percent fixed rate or at SBI+1 percent floating rate.

1. Is there an opportunity here for Wall and Table company to do interest rate swap? Explain!
2. Suppose the dealer in the swaps market demand 2 percent of profit, describe how these two company can do interest rate swap! Use diagram to expalain your answer!