A conglomerate corporation is considering issuing a fixed-rate bond. However, by

Question

A conglomerate corporation is considering issuing a fixed-rate bond. However, by using interest swaps and floating-rate notes, the issuer can achieve the same objective. To do so, the issuer should consider 1) Issuing a floating-rate note of the same maturity and entering into an 2) Issuing a floating-rate note of the same maturity and entering into an 3) Buying a floating-rate note of the same maturity and entering into an 4) Buying a floating-rate note of the same maturity and entering into an interest rate swap paying fixed and receiving float interest rate swap paying float and receiving fixed interest rate swap paying fixed and receiving float interest rate swap paying float and receiving fixed

Explanation / Answer

Issuing a flating rate note of same maturity and entering into an interest rate swap paying fixed and receiving float

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