A savings bank can issue one-year, floating-rate CDs at LIBOR+3% or fixed-rate CDs at 13%. An insurance company can issue one- year, floating-rate CDs at LIBOR+2% or fixed-rate at 9%. Required: a. Where is the comparative advantage of the two Banks? (2 marks) b. What is the net financing cost rate if all the benefits going to Savings Bank? Please state all the relative rates for this swap arrangement for the two banks. Assume a swap intermediary fee of 20 basis points will be paid by Savings Bank as Insurance Company receives no benefits from this swap transaction. (7 marks) c. What is the net financing cost rate if all the benefits going to Insurance Company? Please state all the relative rates for this swap arrangement for the two banks. Assume a swap intermediary fee of 20 basis points will be paid by Insurance Company as Savings Bank receives no benefits from this swap transaction. (7 marks) d. What is the net financing cost rate if both Banks can mutually enjoy the benefits? Please state all the relative rates for this swap arrangement for the two Fls. Assume both Fls agree to pay half of the intermediary fee of 20 basis points respectively. (8 marks) e. List the possible factors that will determine the final swap arrangement. (6 marks)