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Given the following information: Firm Alpha Firm Beta Credit Preference Maturity Fixed Floating 7 years 7 years Fixed Rate 8 % 5 % Floating Rate

Given the following information:
Firm Alpha Firm Beta
Credit Preference Maturity Fixed Floating
7 years 7 years
Fixed Rate 8%5%
Floating Rate LIBOR+1% LIBOR
Which firm has comparative advantage in fixed rate and in floating rate?

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