Design a swap that will net a bank

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Question: Plaza PLC and Impact PLC have been offered the following rates per annum on a £5 million 10-year investment: Fixed rate Floating rate Plaza PLC 8% LIBOR Impact PLC 8.8% LIBOR Plaza PLC requires a fixed-rate investment, and Impact PLC requires a floating-rate investment. Design a swap that will net a bank, acting as an intermediary, 0.2% per annum and that will appear equally attractive to both Plaza and Impact.

Reference no: EM133491105

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