You are a treasurer at City Finance Bhd. You have made an arrangement with Putra Finance to borrow RM2 million in December 2020 for a period of 3 months. Putra Finance agrees to lend you at a rate of 5% p.a. You will also lend RM2 million to Jet Sdn. Bhd. at KLIBOR+0.5% starting in December 2020 for a period of 3 months. What would be your strategy in order to protect your interest income and why?

Answer rating: 100% (QA)

To protect your interest income in this scenario you can consider implementing an interest rate swap ... View the full answer