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You are a company and just issued a $20m 3-year fixed rate bond. Your investment bank...

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Advance Math

You are a company and just issued a $20m 3-year fixed rate bond.Your investment bank suggests that you enter into an interest rateswap to turn this into a floating rate bond. Briefly discuss:

  1. Whether the swap should be one where your company pays fixedand receives floating or the other way around.
  2. Why your company might choose to enter the swap.
  3. Why your company chose to issue a fixed rate bond rather than afloating rate bond.
  4. Another choice that your company could take rather than usingthe interest rate swap

You should answer this question in a few short paragraphs.

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