24-81 What will be the net after-swap yield on assets for the bank?
A)Variable-rate at LIBOR.
B)Fixed-rate at 8 percent.
C)Fixed-rate at 1 percent.
D)Fixed-rate at 2 percent.
E)None of the above.

Question

Quizplus · Accepted Answer

The bank will receive a fixed rate of 8% on the swap and pay a floating rate of LIBOR. The net after-swap yield on assets will be the fixed rate of 8% minus the floating rate of LIBOR.

24-81 What Will Be the Net After-Swap Yield on Assets