Commercial bank A and Savings bank B entered into a swap contract. The swap has a notional principal amount of $100 million and calls for Commercial Bank A to make annual floating interest rate...

Commercial bank A and Savings bank B entered into a swap contract. The swap has a notional principal amount of $100 million and calls for Commercial Bank A to make annual floating interest rate payment of LIBOR minus 1% to Savings Bank B. In return, Savings Bank B pays fixed 8% interest rate to Commercial Bank A. If LIBOR is 8%, what is the net payment?       Commercial Bank A                                      Savings Bank B

1. Savings Bank B pays Commercial Bank A by $1 million


2. Commercial Bank A pays Savings Bank B by $1 million


3. Net pay is 0


4. Can’t get the answer based on the given information