THE NEXT TWO QUESTIONS ARE BASED ON THIS INFORMATION

A bank offers to syndicate a Eurodollar loan for an MNC$.$ The MNC has a credit risk rating of AA$.$

Loan Type: Bullet

Principal: USD $21$ million

Maturity: $4$ years

Upfront Syndication Fee: $1\mathrm{.}95\%$

Interest Rate: LIBOR $+$ credit risk premium, reset every $6$ months

Current LIBOR$6$: $4\mathrm{.}29\%$

Expected nominal interest rate in the US in $6$ months' time: $4\mathrm{.}50\%$

Credit rating $($Premium$)$

AAA $(1\mathrm{.}85\%)$

AA $(2\mathrm{.}15\%)$

$A(2\mathrm{.}75\%)$

BBB $(3\mathrm{.}25\%)$

What is the effective annualized interest rate that the MNC has borrowed at for the first $6$ months?

a$.6\mathrm{.}568\%$

b$.6\mathrm{.}440\%$

c$.6\mathrm{.}262\%$

d$.7\mathrm{.}180\%$

e$.$ None of the options in this question.

What is the effective annualized interest rate that the MNC expects to borrow at for the second $6$ months?

a$.6\mathrm{.}782\%$

b$.6\mathrm{.}650\%$

c$.6\mathrm{.}476\%$

d$.7\mathrm{.}394\%$

e$.$ None of the options in this question.