Question: Suppose that at the present time, one can enter 5 year swaps that exchange LIBOR for 7%. An off-market swap would then be defined as

Suppose that at the present time, one can enter 5 year swaps that exchange LIBOR for 7%. An off-market swap would then be defined as a swop of LIBOR for a fixed rate other than 7% For example, a firm with 10% coupon debt outstanding might ke to convert to synthetic floating-tate debt by entering a swap in which it pays LIBOR and receives a fixed rate of 10% What up front payment will be required to induce a counterparty to take the other side of this swap? Assume notional principal is $35 million (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.) Uptont payment 10.045.000

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