Anyone recalls the setting the swap question?

[Visitors]

I didn't have time to think this one through much but I considered that the profit under this swap was 2.5% - 1.0%, so 1.5% - (0.25% for the intermediary) = 1.25%. Then, dividing the 1.25% in two for a profit of 0.625%for each company on their respective interest rates. Am I out in deep left field?

[PPOwl]

Yep, I remembered the 0.625% per both sides.

[A-Head]

I got the same thing too...Company A pays a floating rate of LIBOR + .875% and Company B pays a fixed rate of 9.375%.

[Kamcio]

I got the same thing too...Company A pays a floating rate of LIBOR + .875% and Company B pays a fixed rate of 9.375%.

Answers sound familiar to me.

[Warren Schmidt]

I got the same thing too...Company A pays a floating rate of LIBOR + .875% and Company B pays a fixed rate of 9.375%.

I got this too.

[MountainHawk]

I got the same thing too...Company A pays a floating rate of LIBOR + .875% and Company B pays a fixed rate of 9.375%.
Just checked my returned exam ... I got this answer as well.

[imnotcrazyur]

Did anyone find it confusing that they used Canadian dollars and US dollars?

[Cracktuary]

Did anyone find it confusing that they used Canadian dollars and US dollars?

Yes, I didn't like that at all! Seemed very fishy. I just went about setting the swap as if it was in USD on both ends, but I had/have a sinking suspicion that there was a trick that I missed (although I can't imagine what that could be without them giving us an exchange rate).

[KindGrind]

We didn't have to bother with USD / CAD exchange rate since we only wanted to know the interest rates...The amount of principal would be adjusted to reflect the exchange rate.

[Cracktuary]

touche