Question 9 Infinity Limited is a Brazilian MNC that has preferences floating rate dollar debt, which it can access directly at LIBOR + 1.50%. In contrast, MSF has a strong preference for fixed rate Brazilian Real debt. However, because of its relatively- unknown presence in the Brazilian market, MSF must pay a 205-basis point premium above the 1.975% semi-annualized coupon rate that Infinity Limited's Real-denominated notes would carry. MSF, however, can currently obtain floating Eurodollar funding at a rate of LIBOR + 0.50%. Suppose that DB charges 100 basis points of the savings to arrange the currency swap between Infinity Limited & MSF, who split the remaining savings equally. What interest rates will the two MNCs now pay after the swap? a) Infinity Limited pays LIBOR + 0.5% & MSF will pay a fixed rate of 4.975%. b) Infinity Limited pays LIBOR + 0.475% & MSF will pay a fixed rate of 3.95%. c) Infinity Limited pays LIBOR + 0.375% & MSF will pay a fixed rate of 3.975%. d) Infinity Limited pays LIBOR + 0.375% & MSF will pay a fixed rate of 3.975%. e) Infinity Limited pays LIBOR + 0.475% & MSF will pay a fixed rate of 4.975%. f) Infinity Limited pays LIBOR + 0.5% & MSF will pay a fixed rate of 3.95%. g) None of the above