(Interest rate swap problem #1, 1 of 4) Company X wants to borrow $10,000,000 floating for 5 years; Company Y wants to borrow $10,000,000 fixed for 5 years. Their external borrowing opportunities are shown below:

	Credit Rating	Fixed-Rate Borrowing Cost	Floating Rate Borrowing Cost
Company X	AA	10.5%	LIBOR
Company Y	A	12.0%	LIBOR+1%

Please match borrowers to their respective absolute and relative competitive advantages.

Group of answer choices

Absolute advantage

[ Choose ] Firm Y Firm X

Comparative advantage in borrowing at a floating interest rate

[ Choose ] Firm Y Firm X

Comparative advantage in borrowing at a fixed interest rate

[ Choose ] Firm Y Firm X