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Business, 25.12.2019 06:31 adelfaali99

Aswap bank proposes the following interest only swap: y will pay the swap bank annual payments on $10,000,000 with a fixed rate of rate of 9.90 percent. in exchange the swap bank will pay to company y interest payments on $10,000,000 at libor − 0.15 percent; what is the value of this swap to company y? a) company y will save 5 basis points per year on $10,000,000 = $5,000 per year. b) company y will only break even on the deal. c) company y will save 45 basis points per year on $10,000,000 = $45,000 per year. d) company y will save 15 basis points per year on $10,000,000 = $15,000 per year.

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