[Max]

hi, im having problems with this question as well. can you please help me?

So after deducting the bank charges of 2X0.2 = 0.4, there is still a savings of 1.2%- 0.4% = 0.8% each party.

So now, How much CMC and the counterparty has to pay ?

According to the answer scheme :

“After paying the 20 basis point fee, CMC Co will effectively pay interest at the yield curve rate and benefit by 40 basis points
or 0·4%, and the counterparty will pay interest at 3·4% and benefit by 40 basis points or 0·4% as well.”

how did they get 3.4% and that CMC has to pay at the yield rate?

[Author]

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