The Following Statement Is to Be Used in Answering Questions

Multiple Choice

The following statement is to be used in answering questions
Axil Corp. has not tapped the Deutsche mark public debt market because of concern about a likely appreciation of that currency and only wishes to be a floating rate dollar borrower, which it can be at LIBOR + 1%. Bevel Corp. strongly prefers fixed rate DM debt, but it must pay 1.5% more than the 6 1/4% coupon that Axil's DM notes would carry. Bevel, however, can obtain Eurodollars at LIBOR + ½%.
-is the maximum possible cost savings to Axil from engaging in a currency swap with Bevel?

A) 1%
B) 75%
C) 2%
D) 1.25%