Companies X and Y have been offered the following rates per annum on a $20 million five-year loan: Fixed Rate Floating R

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Companies X and Y have been offered the following rates per
annum on a $20 million five-year loan: Fixed Rate Floating Rate
Company X 4.2% LIBOR+0.1% Company Y 5.8% LIBOR+0.7%
Company X requires a floating-rate loan; company Y requires a
fixed-rate loan. Design a swap that will net a bank, acting as an
intermediary, 0.2% per annum and that will appear equally
attractive to both companies.
2) A currency swap has a remaining life of 14 months. It
involves exchanging interest at 8% on £10 million for interest at
7% on $16 million once a year. The term structure of interest rates
in both the United Kingdom and the United States is currently flat,
and if the swap were negotiated today the interest rates exchanged
would be 4% in dollars and 6% in sterling. All interest rates are
quoted with annual compounding. The current exchange rate (dollars
per pound sterling) is 1.4500.
(a) What is the value of the swap to the party paying
sterling?
(b)What is the value of the swap to the party paying
dollars?
3) Explain how CCPs work. What are the advantages to the
financial system of requiring all standardized derivatives
transactions to be cleared through CCPs?