Question: Compute the payments due in the first year on a three-year amortizing swap from company B to company A. Company A and company B both

Compute the payments due in the first year on a three-year amortizing swap from company B to company A. Company A and company B both want to borrow 1,000,000 for three years. A wants to borrow floating and B wants to borrow fixed. A and B agree to split the QSD.

	Fixed-Rate	Floating-Rate
	Borrowing Cost	Borrowing Cost
Company X	10%	LIBOR
Company Y	12%	LIBOR + 1.5%

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