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Companies X and Y have been offered the following rates per annum on a 100...

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Companies X and Y have been offered the following rates per annum on a 100 million 3-year loan: Company X Company Y Fixed Rate 6.0% 4.8% Floating Rate LIBOR+1.5% LIBOR +0.9% Company X requires a floating-rate loan and Company Y requires a fixed-rate loan. Design a swap that will neta bank, acting as an intermediary, 0.2% per annum and that will appear equally attractive to both companies. Illustrate the arrangement through a simple graph and provide the rationale for this swap. (7.5 marks)

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