Question
There are two firms that wish to conduct a comparative advantage swap, their respective borrowing rates in the fixed and floating markets are in the
There are two firms that wish to conduct a comparative advantage swap, their respective borrowing rates in the fixed and floating markets are in the table:
|
| Fixed % | Floating % |
| Firm A | 6.6 | Libor+2 |
| Firm B | 9.9 | Libor+3.5 |
What is the total or combined interest rate savings for both firms from conducting the swap? (Answer in basis points. E.g. .30% is 30 basis points)
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Lending Investments And The Financial Crisis
Authors: Elena Beccalli, Federica Poli
1st Edition
1349564982, 978-1349564989
