A Firm Agrees to Accept Payments on a $1,000,000 Loan

A firm agrees to accept payments on a $1,000,000 loan with a fixed interest rate of 8% in exchange for making the payments on a loan with floating rate payments based on LIBOR. Payments are interest only with principal due in 10 years. The firm will benefit

A) if LIBOR falls.
B) if LIBOR rises.
C) if Libor remains unchanged.
D) if LiIBOR fluctuates randomly.

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