Company X and Company Y have been offered the following rates

Company X

Fixed Rate. Floating Rate

3.9%

3-month LIBOR plus 10bp

Company Y

4.7%

3-month LIBOR plus 50 bp

Suppose that Company X borrows fixed and company Y borrows floating. If they enter into a swap with each other where the apparent benefits are shared equally, what is company X's effective borrowing rate?

Select one:

3.5%

3-month LIBOR minus 30bp

3.7%

3-month LIBOR10bp