CIMA Risk Management P3 Question # 90 Topic 10 Discussion

CIMA Risk Management P3 Question # 90 Topic 10 Discussion

P3 Exam Topic 10 Question 90 Discussion:
Question #: 90
Topic #: 10

A US company enters into a five year borrowing with bank A at a floating rate of USD Libor plus 2%.

It simultaneously enters into an interest rate swap with bank B at 3.5% fixed against USD Libor plus 1%.

What is the hedged borrowing rate, taking the borrowing and swap into account?

Give your answer to 1 decimal place


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