A Company Can Invest Funds for Five Years at LIBOR

question 10

Multiple Choice

A company can invest funds for five years at LIBOR minus 30 basis points.The five-year swap rate is 3%.What fixed rate of interest can the company earn by using the swap?

• A) 2.4%
• B) 2.7%
• C) 3.0%
• D) 3.3%

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