Company A and Company B have been offered the following rates Floating Rate 3-month LIBOR plus...

 

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Company A and Company B have been offered the following rates Floating Rate 3-month LIBOR plus 20bp 3-month LIBOR plus 30bp Company A Company B Select one: Suppose that Company A borrows fixed and company B borrows floating. If they enter into a swap with each other where the apparent benefits are shared equally, what is company A's effective borrowing rate? a. 3-month LIBOR-5bp b. 3-month LIBOR+5bp Fixed-Rate c. 3.1% d. 3-month LIBOR-30bp Oe. 3-month LIBOR+30bp 4.0% 4.5% [4 marks] Company A and Company B have been offered the following rates Floating Rate 3-month LIBOR plus 20bp 3-month LIBOR plus 30bp Company A Company B Select one: Suppose that Company A borrows fixed and company B borrows floating. If they enter into a swap with each other where the apparent benefits are shared equally, what is company A's effective borrowing rate? a. 3-month LIBOR-5bp b. 3-month LIBOR+5bp Fixed-Rate c. 3.1% d. 3-month LIBOR-30bp Oe. 3-month LIBOR+30bp 4.0% 4.5% [4 marks]

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The detailed answer for the above question is provided below The correct answer is b 3month LIBOR5bp ... View the full answer