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1. (10 points). ABC and XYZ Companies can borrow for a five-year term at the following rates: XYZ Fixed-rate borrowing cost 11.2% 10.0% Floating-rate borrowing

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1. (10 points). ABC and XYZ Companies can borrow for a five-year term at the following rates: XYZ Fixed-rate borrowing cost 11.2% 10.0% Floating-rate borrowing cost LIBOR+.4% LIBOR Calculate the quality spread differential

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