Firms a and b have entered into an interest rate swap

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Firms A and B have entered into an interest rate swap. On the first payment date, Firm A owes Firm B 12 percent of $10 million, and Firm B owes Firm A 14 percent of $10 million. Most likely, this transaction will be settled in what manner?

a. Firm A will send Firm B $120,000 and Firm B will send Firm A $140,000
b. Firm B will send Firm A $120,000 and Firm A will send Firm B $140,000
c. Firm A will send Firm B $20,000
d. Firm B will send Firm A $20,000
e. none of the above

Reference no: EM131015826

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