Question: please answer both parts 9. A and B can borrow for a 5-yrear term at the following rates: (20%) Rating Fixed rate borrowing cost Floating

please answer both parts

9. A and B can borrow for a 5-yrear term at the following rates: (20%) Rating Fixed rate borrowing cost Floating rate A Aa 10.5% LIBOR B Baa 12.0% LIBOR+1% a. Calculate QSD b. Develop an interest rate swap in which both A and B have an equal cost savings in their borrowing costs. Assume A desires floating-rate debt and B desires fixed-rate debt. No swap bank is involved in this transaction

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