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7. Company A and B have been offered the following loan rates: Company Fixed Rate...

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7. Company A and B have been offered the following loan rates: Company Fixed Rate Floating Rate A 18% LIBOR+5% B 10% LIBOR+1% Company A requires a fixed rate loan and B requires a floating rate loan. Suppose two parties can engage directly each other. Design an interest rate swap between two parties that both have advantage over the loan rates in the market. (15 pts)

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