Calculate the gross payments

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Reference no: EM131457901

Question: Calculate the gross payments involved and indicate who pays what in this swap deal.

The next two questions use the following information:

Esandel Bank enters into a plain vanilla interest rate swap with a swap facilitator Londoner Inc. Esandel pays a fixed amount of 8 percent per year to Londoner, which in turn pays a floating amount bbalibor +1.50 percent. The principal is $15 million. The swap lasts for five years, and the payments take place at the end of each year.

Reference no: EM131457901

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