Use the Following Information to Calculate the Quality Spread Differential

Multiple Choice

Use the following information to calculate the quality spread differential (QSD) : $\begin{array}{lll} & \begin{array}{l}\text { Fixed-Rate Borrowing } \\\text { Cost }\end{array} & \begin{array}{l}\text { Floating-Rate } \\\text { Borrowing Cost }\end{array} \\\hline \text { Company X } & 10 \% & \text { LIBOR } \\\text { Company Y } & 12 \% & \text { LIBOR }+1.5\%\end{array}$

A) 0.50%
B) 1.00%
C) 1.50%
D) 2.00%