1. In a “plain vanilla” swap there is an agreement between two parties to:
2. You are given the following potential borrowing costs between two companies.
Fixed Rate | Floating Rate | |
---|---|---|
Company A | Treasury Bond + 2% | $LIBOR + 3% |
Company B | Treasury Bond + 3% | $LIBOR + 2.5% |
3. You are given the following potential borrowing costs between two companies.
Fixed Rate | Floating Rate | |
---|---|---|
Company A | Treasury Bond + 2% | $LIBOR + 2% |
Company B | Treasury Bond + 3% | $LIBOR + 2.5% |
4. You are given the following potential borrowing costs between two companies.
Fixed Rate | Floating Rate | |
---|---|---|
Company A | Treasury Bond + 3% | $LIBOR + 2.5% |
Company B | Treasury Bond + 1% | $LIBOR + 1% |
5. You are given the following potential borrowing costs between two companies in two currencies. Company A wishes to borrow fixed and Company B wishes to borrow floating.
UK Pound Fixed Rate | US Dolloar Floating Rate | |
---|---|---|
Company A | 9% | $LIBOR + 1% |
Company B | 11% | $LIBOR + 3.5% |