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If Two Firms Have the Following Cost of Borrowing,what Is

Question 3

Multiple Choice

If two firms have the following cost of borrowing,what is the net differential for an interest rate swap?
Firm A:
Fixed rate 10.8% per annum; floating rate BBSW+0.3% per annum
Firm B:
Fixed rate 11.6% per annum; floating rate BBSW+1.7% per annum


A) 2.2%
B) 1.4%
C) 0.7%
D) 0.6%

Correct Answer:

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