Calculate the effective fixed rate

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A corporation has a variable-rate loan with a bank paying LIBOR plus 65. The company wants to make a synthetic fixed-rate loan and enters into an interest rate swap paying a swap fixed rate of 9 percent and receives LIBOR. The company also pays an annual swap spread of 35 basis points to the swap dealer. Calculate the effective fixed rate on the synthetic fixed-rate loan.

Reference no: EM1370877

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