Question: Need the working out for these Homework 1 Homework 2 Two parties wish to enter into a direct swap to take advantage of the other

Need the working out for these

Homework 1 Homework 2 Two parties wish to enter into a direct swap to take advantage of the other party's comparative advantage. Party A wishes to borrow at a fixed rate, but if it went into the market, it could borrow fixed at 9.50%. However, if it borrowed floating, it could borrow at BBSW + 2.45% Party B wishes to borrow floating, and if it did SO, it could borrow at BBSW + 1.05%. However, if it borrowed fixed, it could borrow at 7.35% Two parties wish to enter into a direct swap to take advantage of the other party's comparative advantage. Party A wishes to borrow at a fixed rate, but if it went into the market, it could borrow fixed at 13.50%. However, if it borrowed floating, it could borrow at BBSW + 3.95% Party B wishes to borrow floating, and if it did so, it could borrow at BBSW + 2.85%. However, if it borrowed fixed, it could borrow at 8.85% Describe the transaction which will maximise the benefit for both parties Describe the transaction which will maximise the benefit for both parties

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