### 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

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