A Ltd., an Australian manufacturer, wishes to borrow US dollars at a floating rate of interest while Y Inc., a US multinational, wishes to borrow Australian dollars at a fixed rate of interest. The companies have been quoted the following rates:

USD AUD

A Ltd. LIBOR +2% 7.5% fixed

Y Inc LIBOR +1%7 . 3% fixed

If the financial intermediary charges 20 basis points, how much would Y Ltd. pay the bank? Please show working out

(a)AUD fixed 7.2%

(b)AUD fixed 7.0%

c)USD LIBOR + 1.7%(

d)USD LIBOR + 0.7%