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 Borrowing Cost			Floating-Rate Borrowing Cost
Company A		10	%		LIBOR
Company B		12	%		LIBOR + 1.5	%

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