Companies A and B face the following interest rates (adjusted for the differential impact of a Company
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Companies A and B face the following interest rates (adjusted for the differential impact of a Company A Company US dollars (floating rate): Canadian dollars (xed rate); LIBOR +0.5% 5.0% LIBOR +1.0% 6.5% Assume that A wants to borrow US dollars at a floating care of interest and B wants to borrow Canadian dollars at a fixed rate of interest. A financial institution is planning to arrange a swap and requires a 30-basis-point spread. If the swap is equally attractive to A and B. what rates of interest wil A and B end up paying?
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