Bank A and Bank B have the following opportunities for borrowing in the floating-rate and fixed-rate markets. They both want to obtain funding of $10m for five years. Bank A Bank B Floating Rate Fixed Rate BBR+1.0% 8% BBR+ 2.0% 10.5% (a) In which debt market does Bank A have a comparative advantage over Bank B? (6) Construct a swap transaction that benefits both parties (draw diagram). (Assuming no intermediary fee, what are the total cost savings from the swap? (d) Provide an example of swap terms to show how the interest rate swap could lower the borrowing costs for both banks. (2+2+2+4=10 marks)