Question: Just few basic steps and the anwser no need for complicated things. Suppose that Company X borrows fixed and company Y borrows floating. If they

Just few basic steps and the anwser no need for complicated

Just few basic steps and the anwser no need for complicated things.

Suppose that Company X borrows fixed and company Y borrows floating. If they enter into swap with each other where the apparent benefits are shared equally, what is each company's effective borrowing rate? Draw the corresponding graph showing this relationship when there is a financial intermediary charging 30BP in commission

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