BBC$($Australia$).$ Botany Bay Corporation$($BBC$)$ of Australia seeks to borrow US$ $30$ comma $000$ comma $000$ in the eurodollar market. Funding is needed for two years. Investigation leads to three possibilities. Compare the alternatives and make a recommendation.

$1.$ Botany Bay could borrow the US$ $30$ comma $000$ comma $000$ for two years at a fixed $6\%$ rate of interest.

$2.$ Botany Bay could borrow the US$ $30$ comma $000$ comma $000$ at LIBORplus$1\mathrm{.}500\%.$ LIBOR is currently $3\mathrm{.}500\%,$ and the rate would be reset every six months.

$3.$ Botany Bay could borrow the US$ $30$ comma $000$ comma $000$ for one year only at $4\mathrm{.}500\%.$ At the end of the first$$ year, Botany Bay would have to negotiate for a new$$ one$-$year loan.