Question
Company X and Company Y have been offered the following rates Fixed Rate Floating Rate Company X 3.5% 3-month LIBOR plus 10bp Company Y 4.5%
Company X and Company Y have been offered the following rates
|
| Fixed Rate | Floating Rate |
| Company X | 3.5% | 3-month LIBOR plus 10bp |
| Company Y | 4.5% | 3-month LIBOR plus 30 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 Xs effective borrowing rate?
| A. | 3-month LIBOR30bp
| |
| B. | 3.1%
| |
| C. | 3-month LIBOR10bp
| |
| D. | 3.3%
|
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Financial Management For Nurse Managers Merging The Heart With The Dollar Merging The Heart With The Dollar
Authors: J. Michael Leger, Janne Dunham-Taylor
4th Edition
1284127257, 978-1284127256
