3. The following table shows the borrowing opportunities for two firms. Fixed rate Floating rate Firm A 11.75 96 LIBOR +1.00% Firm B 9.759 LIBOR Firm A can borrow at a floating rate at LIBOR+1.00%. However, Firm A would prefer to raise the money by issuing 5-year fixed-sate notes at 11.75%. On the other hand, Firm B considers issuing 5-year fixed rate Eurodollar bonds at 9.75% while it would make more sense for Firm B to borrow at a floating rate at LIBOR. Finally. the swap bank makes the following offers to both firms. Interest Rate Swap Swap LROR -10% LIBOR a) What is the total gain for this swap? In other words, figure out QSD (quality spread differential). (25 points) b) Figure out the gain for Firm A (25points) c) Figure out the gain for Firm B. (25points) d) Figure out the gain for Swap bank. (25points)