The correct answer is D $10\mathrm{.}45\%10\mathrm{.}45\%$ against LIBOR flat.

Company $x$ wants to borrow $$10,000,000$ floating for $5$ years; company $Y$ wants to borrow

$$10,000,000$ fixed for $5$ years. Their external borrowing opportunities are shown below.

A swap bank is involved and quotes the following rates five$-$year dollar interest rate swaps at

$10\mathrm{.}05$ percent $-10\mathrm{.}45$ percent against LIBOR flat. Assume company $Y$ has agreed, but company

$x$ will only agree to the swap if the bank offers better terms. What are the absolute best terms the

bank can offer X$,$ given that it already booked Y$?$

A $,10\mathrm{.}45\%-10\mathrm{.}05\%$ against LIBOR flat.

B $,10\mathrm{.}50\%-10\mathrm{.}50\%$ against LIBOR flat.

C $,10\mathrm{.}05\%-10\mathrm{.}45\%$ against LIBOR flat.

D $,10\mathrm{.}45\%-10\mathrm{.}45\%$ against LIBOR flat.