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Ctr 16. Company A, a British manufacture have been quoted the following rates per annum (adjusted for diie points) Company B, a US multinational, wishes to borrow sterling at a fil tax effects)( r, wishes to borrow US dollars at a fixed rate of interest. ow sterling at a fixed rate of interest. They Company A Company B Sterling 11.0% US Dollars 70% 6.0% 10.6% a. Show that it would be justified (via the idea of comparative advantage) for a bank to intermediate a swap points for each of the two companies where it nets 10 basis points and produces a gain of 25 basis Show a possible swap implementing this transaction through a cash flow diagram (fill in below b. Company B Financial Institution Company A c. What risk does the bank take on? Can it hedge this risk? How