[sali5]

Thanks for sharing this.

I am not fully convince as to why floating rate is a better option than fixed rate for CMC Co in this question?

CMC Co –> 2.2% and Y + 0.4%
Counterparty –> 3.8% and Y + 0.8%

9 out of 10 times I would have instantly selected fixed rate based on the rates available for CMC Co and Counterparty. Plus, the question leaves it for candidate to decided rather than providing some sort of a clue. Normally, swap questions seems to provide some clue.

CMC; Counterparty
2.2%; Yield + 0.8%

Should this not be swapped around before CMC and subsequently counterparty pays? So, Yield + 0.8% for CMC and 2.2% for counterparty.

Considering the learning topic example where the following was swapped for Co X and Co Y:

Co X; Co Y
LIBOR + 3%; 12%
12%; LIBOR + 3%

Thanks

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