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Question
Your firm enters into a swap agreement with a notional principle of $40 million where the firm pays a fixed-rate of interest of 5.50% and receives a variable-rate of interest equal to LIBOR plus 150 basis points. If LIBOR is currently 3.75%, the NET amount your firm will receive (+) or pay (-) on the next transaction date is
A. -$2,200,000
B. $2,625,000
C. $125,000
D. -$100,000
E. -$875,000
Answer
This answer is hidden. It contains 116 characters.
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