Please this is an actual testt. I need the answer within an hour. Please do not take it if you cannot do it within an hour. 2 problem question. Please type the answer in word at attach please. Thanks

5.Spalding Finance Inc. can borrow at a fixed rate of 10% or at LIBOR-50 basis points.Jamaica Manufacturing can borrow at a fixed rate of 13% or at LIBOR+100 basis points.

a.Suppose Spalding Finance prefers a floating rate loan while Jamaica Manufacturing prefers a fixed rate loan.Is there a mutually advantageous opportunity to engage in an interest rate swap?Briefly explain.(2 points)

b.JamaicaManufacturing proposes to pay 10.8% in return for LIBOR+0.What is the cost of borrowing for Spalding and Jamaica after the swap?(7 points)

c.What is the cost saving that each party realizes under the swap terms in part b.?(3 points)

6.a.Assume that capital markets are competitive and that the international Fisher hypothesis holds. The one-year interest rate is approximately 2% in the USA and 6% in New Zealand. If the expected inflation rate is 5% in the USA, what is the expected inflation rate in New Zealand? (5 points)

b.A firm wants to use an option to hedge 1,000,000 Euros in receivables. The premium paid is US$0.02/Euro and the exercise price is US1.4/Euro. If the option is exercised, what is the total dollar amount received after accounting for the premium paid? (Ignore all other transaction costs and the time value of the money for the premium paid.) (5 points)