Question
Companies A and B face the following interest rates: A Company B US Dollars (floating rate) LIBOR+0.5% LIBOR+1.0% Canadian dollars (fixed rate) 5.2% 7.01% Assume
Companies A and B face the following interest rates: A Company B
US Dollars (floating rate) LIBOR+0.5% LIBOR+1.0%
Canadian dollars (fixed rate) 5.2% 7.01%
Assume that A wants to borrow U.S. dollars at a floating rate of interest and B wants to borrow Canadian dollars at a fixed rate of interest. A financial institution is planning to arrange a swap and requires a 50-basis-point spread. If the swap is equally attractive to A and B, what rates of interest would B end up paying?
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Accounting
Authors: Carl warren, James Reeve, Jonathen Duchac, Sheila Elworthy,
Volume 1, 2nd canadian Edition
176509739, 978-0176509736, 978-0176509743
