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What is National Bank’s role in the interest rate swap and how much will they be compensated for their involvement in this transaction?
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What is National Bank’s role in the interest rate swap and how much will they be compensated for their involvement in this transaction?

User Keith Bennett
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1 Answer

4 votes

Solution:

The role of the National Bank is an interest rate swap trader. This works for LC Inc. and Halogen as an agent. Through earning 10 percentage points over a study number, or $200,000 per year, National Bank will be paid for their participation.

National Bank Compensation:

Receives 3.1% Fixed

Pays 3% Fixed

Receives 6-Month LIBOR

Pays 6-Month LIBOR

Net Compensation 0.1%

User Daniele Pallastrelli
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3.6k points
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