Firm A can borrow at the floating rate of LIBOR+0.5% p.a. or at the fixed rate of 4.0% p.a. Firm B can borrow at LIBOR+1.0% p.a. floating or at 5.25% p.a. fixed. Which of the following statements is false?

Select one:

a.

Firm A has an absolute advantage in borrowing floating rate.

b.

Firm B has an absolute disadvantage in borrowing fixed rate.

c.

Firm A has a comparative advantage in borrowing floating rate.

d.

Firm B has a comparative advantage in borrowing floating rate.

e.

Firm A has a comparative advantage in borrowing fixed rate.