Floating-­rate bonds yielding LIBOR plus

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An insurance company owns $50 million of floating-­rate bonds yielding LIBOR plus 1 percent. These loans are financed by $50 million of fixed-rate guaranteed in­vestment contracts (GICs) costing 10 percent. A finance company has $50 million of auto loans with a fixed rate of 15 percent. They are financed by $50 million of CDs with a variable rate of LIBOR plus 4 percent. If a swap bank arranges a swap, what is an example of a feasible swap?

Reference no: EM13945211

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