Citibank is arranging a classic interest swap between two


Citibank is arranging a classic interest swap between two companies: Alpha Inc. & Beta Corp. Alpha can borrow floating rate at LIBOR+0.6% or fixed rate at 7.6%. Beta can borrow floating at LIBOR +1.1% or fixed rate at 9.1%. Alpha wants to pay a floating rate and Beta wants to pay a fixed rate. If Citibank takes 12 bps, how much savings is available to be divided between the two companies?

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Business Economics: Citibank is arranging a classic interest swap between two
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