Nokia, a Finnish firm wants to finance an AUD 52 million expansion in Australia. The firm could raise EUR 40 million in the Euro capital markets at 6% while its cost of borrowing in Australia would be 9%. A Swap bank has arranged a currency swap with Australian firm Telstra that is looking to raise EUR 40 million. Telstra faces a borrowing rate of 8% on $52 million in Australia and 7% in the Eurobond market. The Swap bank quotes AUD swaps at 8.00 - 8.20 and EUR swaps at 6.00 - 16.15. The spot rate is 1.2 AUD = 1 EUR. a. What will the benefit (in AUD) of the swap be for Nokia? b. In which currency does Nokia have comparative advantage? Explain why might Nokia face such an unfavorable borrowing rate in Australia. c. How has the swap market evolved since the IBM- World Bank swap in 1982? C