Citibank is arranging a classic interest swap between two


Question: 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 fixed rate. If citibank takes 12 bps, how much saving is available to be divided between the two companies?

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Finance Basics: Citibank is arranging a classic interest swap between two
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