Company X and Company Y have been offered the following interest rates

	Fixed Rate	Floating Rate
Company X	3.3%	3-month LIBOR plus 10bp
Company Y	4.2%	3-month LIBOR plus 40 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?

Select one:

3.1%

3-month LIBOR minus 20bp

3-month LIBOR minus 30bp

2.9%