SwapsForums › Ask CIMA Tutor Forums › Ask CIMA P3 Tutor Forums › SwapsThis topic has 1 reply, 2 voices, and was last updated 5 years ago by Ken Garrett.Viewing 2 posts - 1 through 2 (of 2 total)AuthorPosts October 30, 2019 at 1:22 am #551177 ishan777MemberTopics: 5Replies: 2☆P3 mock question helpH has a loan borrowed at LIB+4% H would prefer fixed rate at 8%J pays fixed at 9% Prefers to pay variable at LIB+1%Bank will require 10% of savings from the swap, H and J will share the remaining equally. Calculate Hs effective rate of interest as a result.I found the spread here as 2% but do not know how to proceed further. Please assist. October 30, 2019 at 11:11 am #551228 Ken GarrettKeymasterTopics: 10Replies: 10544☆☆☆☆☆Now they pay L + 4 + 9 = L + 13After swap they would pay 8 + L + 1 = L + 9Saving is 4%, of whichmthe bank wants 10%, so net is 3.6, or 1.8 each.Therefore, H will pay 8 – 1.8 = 6.2.AuthorPostsViewing 2 posts - 1 through 2 (of 2 total)You must be logged in to reply to this topic.Log In Username: Password: Keep me signed in Log In