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(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
(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: Fixed-Rate Credit Rating Floating Rate Borrowing Cost 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 Absolute advantage Choose Comparative advantage in borrowing at a floating interest rate Choose Comparative advantage in borrowing at a fixed interest rate (Choose
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