Design a swap that will appear equally attractive

Reference no: EM131796055

Question: Company A and B have been offered the following rates per annum on a $20 million five year loan:

	Fixed rate	Floating rate
Company A	5.5%	LIBOR + 1%
Company B	6.25%	LIBOR + 1.25%

Company A requires a floating-rate loan; company B requires a fixed-rate loan. Design a swap that will appear equally attractive to both companies.

Reference no: EM131796055

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