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9. Two firms needing to borrow cost effectively are seeking swapping interest rates with a counterparty to lower interest expense. The difference between their fixed-rate
9. Two firms needing to borrow cost effectively are seeking swapping interest rates with a counterparty to lower interest expense. The difference between their fixed-rate quotes is 0.5%, the difference between their variable rate quotes is 0.3%. The quality spread difference indicates:
a. A swap advantage is not present
b. A swapa advantage exists
c. Not enough information to decide
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