Two parties enter a three-year, plain-vanilla interest-rate swap agreement to exchange the LIBOR rate for a 10 percent fixed rate on $10 million. LIBOR is 11 percent now, 12 percent at the end of the first year, and 9 percent at the end of the second year. If payments are in arrears, which of the following characterizes the net cash flow, to be received by the fixed-rate payer
A.
A. $100000 at the end of year 2. |
B.
B. $100000 at the end of year 3. |
C.
C. $200000 at the end of year 2. |