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Given the following table regarding the financing costs for Firm A and Firm B, please answer questions 14-20. 18). What should A and B do?
Given the following table regarding the financing costs for Firm A and Firm B, please answer questions 14-20. 18). What should A and B do? A. Nothing because there is no way for them to decrease financing costs. B. A borrowed dollars, B borrowed pounds, then sign currency swap contracts through a swap bank, and then share the QSD. 19). If A and B sign swap contracts, which one should (in real life) receive a larger share of QSD? A. Generally A because it has lower credit risk B. Generally B because it has higher credit risk C. In real life, they should split it 50/50. D. There is no way to determine, as this thing is random. 20). Do most swap banks serve as a broker or dealer in the swap contracts? A. Broker B. Dealer
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