TABLE 15.2 Use the Information to Answer Following Question(s)

question 5

Multiple Choice

TABLE 15.2
Use the information to answer following question(s) .

-Refer to Table 15.2. Which of the following swap agreements could work for Shell and Merck with Barclay's as the facilitating bank?

• A) Merck borrows at a fixed rate of 6% and then enters into "receive fixed, pay floating" interest rate swap with Barclay's. Shell borrows money at a variable rate of LIBOR + 1% and then enters into "receive variable, pay fixed" interest rate swap with Barclay's.
• B) Shell borrows at a fixed rate of 6% and then enters into a "receive variable, pay fixed" interest rate swap with Barclay's. Merck borrows money at a variable rate of LIBOR + 1% and then enters into "receive fixed, pay floating" interest rate swap with Barclay's.
• C) Shell borrows at a fixed rate of 6% and then enters into "receive fixed, pay floating" interest rate swap with Barclay's. Merck borrows money at a variable rate of LIBOR + 1% and then enters into "receive variable, pay fixed" interest rate swap with Barclay's.
• D) None of the above would satisfy both Shell and Merck.

---

Definitions:

Ascites

The accumulation of fluid in the peritoneal cavity, causing abdominal swelling.

Serous Fluid

A clear, pale yellow fluid that fills the space between the membranes lining the body cavities and surrounding internal organs.

Peritoneal Cavity

The potential space within the abdomen that contains the intestines, liver, and other abdominal organs, enclosed by the peritoneum.

Intussusception

A medical condition where part of the intestine folds into another section of the intestine, leading to blockage.