Walmart and Apple each need to borrow $100 million for five years. The box below shows their credit ratings and applicable interest rates.

Company	Credit rating	Fixed rate available	Floating rate available
Walmart	C	4.5%	6 month LIBOR + 0.5%
Apple	BBB	3%	6 month LIBOR

Barclays offer swap terms to Walmart and Apple based on a notional $100million

For five years, Walmart will pay 3.5% fixed to Barclays and receive 6 month LIBOR

For five years, Apple will pay 6 month LIBOR to Barclays and receive fixed 3.25%

Calculate the cash flows from this swap and explain the benefit to each party

Citi has made a 3-month loan of 3million at 3-month LIBOR rate against a 6-month deposit paying 6 month LIBOR. Citi expects 3-month LIBOR to be 6% in 3 months however Citi is concerned that LIBOR might fall to 5.125% within this time frame. The bank can sell a forward rate agreement (FRA) for 3million with an agreement rate set at 6% and a settlement rate of 5.12%. Should the bank sell the FRA?