A Swap Bank Makes the Following Quotes for 5-Year Swaps $$\begin{array} { c c c c } \text { Bid } & \text { Ask } & \text { Bid } & \text { Ask } \\5 \% & 5.2 \% & 7 \% & 7.2 \%\end{array}$$

question 13

Multiple Choice

A swap bank makes the following quotes for 5-year swaps and AAA-rated firms: USD Euro
$$\begin{array} { c c c c } \text { Bid } & \text { Ask } & \text { Bid } & \text { Ask } \\5 \% & 5.2 \% & 7 \% & 7.2 \%\end{array}$$

• A)The bank stands ready to pay $5.2 percent against receiving dollar LIBOR on 5-year loans.
• B)The bank stands ready to receive €7 percent against receiving dollar LIBOR on 5-year loans.
• C)The bank stands ready to pay €7 percent against receiving dollar LIBOR on 5-year loans.
• D)none of the options

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