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A borrower with a $4 million floating rate loan pays LIBOR plus 200 basis points on the loan. Payments are semiannual. The borrower wishes to convert this obligation to a fixed-rate loan. The borrower uses a swap with a fixed rate equal to 5.6%, floating rate equal to LIBOR, and notional principal equal to $4 million. Which of the following most closely approximates the semiannual payments made by the borrower on the loan and the swap? A. $76,000. B. $72,000. C. $152,000. |