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Calculate the net coupon exchange for the first period if

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Reference no: EM13568844

You are given the following information about an interest rate swap: two year term, semiannual payment, fixed rate = 6%, floating rate = LIBOR + 50 basis points, notional USD 10 million. Calculate the net coupon exchange for the first period if LIBOR is 5% at the beginning of the period and 5.5% at the end of the period.

A. Fixed-rate payer pays USD 0

B. Fixed-rate payer pays USD 25,000

C. Fixed-rate payer pays USD 50,000

D. Fixed-rate payer receives USD 25,000

Reference no: EM13568844

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