Business
Business, 30.04.2021 19:50, tra80

CA Corp issued a 5-year loan of 100,000 to Barry. Barry will repay the loan in five years with annual interest payments based on a variable interest rate equal to the one-year LIBOR rate plus a spread of 120 basis points. Barry is concerned that there will be large fluctuations in interest rate, which will negatively affect his ability to repay the loan. You are given the following information on interest rate swaps: Counterparty Swap Rate Variable Rate Allen 2.5%2.5% LIBOR 1.2%1.2% Clark 2.5%2.5% LIBOR 1.2%1.2% Bruce 2.5%2.5% LIBOR 1.2%1.2% The swap term for each of the interest rate swap is 5 years. Required:
Which situation is the most accurate representation of the best strategy chosen by Barry to reduce the impact of the large interest rate fluctuations?

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CA Corp issued a 5-year loan of 100,000 to Barry. Barry will repay the loan in five years with annua...

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