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really need help with 2 - 6, please and thank you! Interest cost saving with a swap contract using comparative advantage . 5 year loans
really need help with 2 - 6, please and thank you!
Interest cost saving with a swap contract using comparative advantage . 5 year loans FB BABA Fixed rate 30% 6.0% Floating rate LIBOR+50 bpLIBOR+570 bp Currently, the 5-year swap rate is 2.1%. (1) In which market FB and BABA have respective comparative advantage in the fixed and floating rate mrkets? (2) How much can FB save using the interest rate swap? (3) How much can BABA save using the interest rate swap? 4) How much is the sum of individual interests under the comparative advantage? (5) How much is the sum of individual interests under the comparative disadvantage? (6) What is the difference in the total interest rates in the above (3) and (4) Interest cost saving with a swap contract using comparative advantage . 5 year loans FB BABA Fixed rate 30% 6.0% Floating rate LIBOR+50 bpLIBOR+570 bp Currently, the 5-year swap rate is 2.1%. (1) In which market FB and BABA have respective comparative advantage in the fixed and floating rate mrkets? (2) How much can FB save using the interest rate swap? (3) How much can BABA save using the interest rate swap? 4) How much is the sum of individual interests under the comparative advantage? (5) How much is the sum of individual interests under the comparative disadvantage? (6) What is the difference in the total interest rates in the above (3) and (4)Step by Step Solution
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