Question 9

QUESTION 9 Kim PLC and Edith PLC are two Irish companies. Both companies can lend or borrow money at elther flxed or floating rates. On 1st March Kim PLC needed to borrow 1,000,000 and it chose a fixed rate loan. On the same date Edith PLC had cash of C1,000,000 which it chose to put on deposit at a floating rate. Which of the following statements is most plausible: Kim expects interest rates to fall but Edith expects interest rates to rise Both companies expect interest rates to fall Both companies expect interest rates to rise Edith expects interest rates to fall but KIm expects interest rates to rise