Please solve the following questions: X AA 10.5% Z BBB 12.5% Fitch's credit rating Fixed-rate borrowing COST Floating-rate borrowing LIBOR LIBOR+1 COSI Calculate the quality spread differential (QSD). (5 points) b. Develop an interest rate swap in which both X and Z have an equal cost savings in their borrowing costs. Assume X desires floating-rate debt and 2 desires fixed-mate debt. No swap bank is involved in this transaction (15 points) c. Do problem I over again, this time assuming more realistically that a swap bank is involved as an intermediary. Assume the swap bank is quoting five-year dollar interest rate swaps at 10.9% - 11.1% against LIBOR flat. (15 points)