Counterparty X borrows from the physical market at LIBOR + 1.5%, while Counterparty Y borrows from the physical market at a fixed 8.5%. Into the swap, Counterparty X pays 8.65% and Counterparty Y pays LIBOR + 0.7%. The net cost to Counterparty X is:

Select one:

a. LIBOR + 0.7%

b. LIBOR + 1.5%

c. 8.65%

d. 9.45%

e. 8.5%

f. 9.6%