Question: 1) Consider the borrowing rates for Parties A and B. A wants to finance a $100,000,000 project at a fixed rate. B wants to finance

1) Consider the borrowing rates for Parties A and B. A

1) Consider the borrowing rates for Parties A and B. A wants to finance a $100,000,000 project at a fixed rate. B wants to finance a $100,000,000 project at a floating rate. Both firms want the same maturity, 5 years. Firm A B Fixed Rate $ 10.3% $ 8.9% Floating Prime + 1% Prime + 1/2% Construct a mutually beneficial interest only swap that makes money for A, B, and the swap bank in equal measure

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