24-79 What will be the net after-swap cost of funds for the bank if the cash market liabilities are included in the analysis?
A)Variable-rate at LIBOR.
B)Fixed-rate at 8 percent.
C)Fixed-rate at 1 percent.
D)Fixed-rate at 2 percent.
E)None of the above.

Question

Quizplus · Accepted Answer

The net after-swap cost of funds for the bank, when cash market liabilities are included, is typically a variable rate at LIBOR, as swaps are often used to convert fixed-rate liabilities to variable-rate liabilities tied to LIBOR.

24-79 What Will Be the Net After-Swap Cost of Funds