QUESTION 2

2.a)

fintech berhad has requested a rm 50 million, 7 yearo be serviced quaterly and the bank is willing to receives loans from a local bank. the bank is willing to lend on a floating rate at 3-month klibor+1%. assume the loan will have to be serviced quaterly and the bank is willing to receive 3.7%. the cfo is worried having heard that interest is likely to rise over the foreseeable future. elaborate on the action taken by cfo with a diagram to hedge the interest rate exposure. (10marks)