Assume that an AAA customer pays 8% on a five-year loan and can contract a five-year interest
rate swap (paying fixed) at 8% against LIBOR. Assume that a BBB customer pays (8 +0 m)% on a
five-year loan and can contract a five-year interest rate swap (paying fixed) at (8 + µ)% against LIBOR. Should a customer pay the same credit-quality spread (m and µ) on a loan and on a swap?

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The Answer of Assume that an AAA customer pays 8% on a five-year loan and can contract a five-year interest
rate swap (paying fixed) at 8% against LIBOR. Assume that a BBB customer pays (8 +0 m)% on a
five-year loan and can contract a five-year interest rate swap (paying fixed) at (8 + µ)% against LIBOR. Should a customer pay the same credit-quality spread (m and µ) on a loan and on a swap?

Assume That an AAA Customer Pays 8% on a Five-Year