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Old 05-05-2005, 01:42 AM
BDP BDP is offline
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Join Date: Jun 2004
Posts: 33
Default Help with Swaps

Can someone help me with this problem:


8. Swaps, I. Miss Molly.com and MaxFu Enterprises have been offered the following rates per annum on a $20,000,000 5-year loan:

Fixed Rate Floating Rate

Miss Molly.com 7.0% LIBOR + 0.1%
MaxFu Enterprises 9.9% LIBOR + 2.7%


Miss Molly.com requires a floating rate loan. MaxFu Enterprises requires a fixed-rate loan. Design an interest rate swap that benefits Miss Molly.com twice as much as it does MaxFu Enterprises.
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