Company A wants fix borrowing. Company B wants floating borrowing. A can borrow fix at 2% and
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Question:
Company A wants fix borrowing.
Company B wants floating borrowing.
A can borrow fix at 2% and floating at CDOR + 1/2%
B can borrow fix at 1.85% and floating at CDOR + 1/4%
If the profit/loss of the swap is shared half/half between A and B what is the final outcome?
Select one:
a. "B" final borrowing rate will be CDOR + 35 basis points
b. "B" final borrowing rate will be CDOR + 20 basis points
c. "A" final borrowing rate will be 3.05%
d. "A" final borrowing rate will be 2.95%
Related Book For
Corporate Finance Principles And Practice
ISBN: 9781292450940
9th Edition
Authors: Denzil Watson, Antony Head
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