XCV can borrow at either 9.

XCV can borrow at either 9.5% fixed or the risk-free rate plus 1.3%.

XCV wishes to borrow at a variable rate and thinks that a swap may enable it to do so cheaply

BNM can borrow the same principal sum as XCV It can borrow at 10 5% fixed or the risk-free rate plus 2 1 % BNM wishes to raise fixed rate debt

XCV and BNM have agreed to use an interest rate swap They will share any savings equally

Calculate the effective swap rate that will be paid by XCV.

Give your answer to one decimal place.