Company a Can Borrow Money at a Fixed Rate of 9.5

question 227

Multiple Choice

Company A can borrow money at a fixed rate of 9.5% or a variable rate set at prime plus 0.5% Company B can borrow money at a variable rate of prime plus 1% or a fixed rate of 9% Company A prefers a fixed rate and company B prefers a variable rate. Given this information, which one of the following statements is correct?

• A) Company A can swap with B and pay a fixed rate of 8.75%
• B) If Company A swaps with B, Company A will pay a fixed rate between 9 and 9.5%
• C) If Company B swaps with A, Company B must pay a fixed rate of 9.5%
• D) Company B can swap with A such that Company B pays the variable prime rate.
• E) There are no terms under which both Company A and Company B can swap interest rates and both realize a profit.

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France

A Western European country known for its rich history, cultural heritage, and significant contributions to art, philosophy, and science.

Canada

A country in North America, known for its vast wilderness, multicultural cities, and bilingual (English and French) heritage.

Modern Passenger Plane

A contemporary aircraft designed for the commercial transportation of passengers, featuring advancements in safety, comfort, and efficiency.

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