Ten-year fixed-rate investments

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Reference no: EM131304612

A company’s investments earn LIBOR minus 0.60%. Explain how it can use the quotes in Table 5.5 to convert them to (a) three-, (b) five-, and (c) ten-year fixed-rate investments.

table 5.5 below

maturity(years) Bid Offer Swap Rate

2 6.03 6.06 6.045

3 6.21 6.24 6.225

4 6.35 6.39 6.370

5 6.47 6.51 6.490

7 6.65 6.68 6.665

10 6.83 6.87 6.850

Reference no: EM131304612

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