Use the Following Information to Calculate the Quality Spread Differential

question 20

Multiple Choice

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

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

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Definitions:

AWS E-11018

A specification for a type of covered electrode used in shielded metal arc welding, known for its excellent mechanical properties and crack resistance.

Kingpin

A critical pivot point in the steering mechanism of a vehicle, around which the steerable wheels rotate.

Grade 8

Refers to high-quality, high-strength fasteners made of medium carbon alloy steel, marked with six radial lines on the head.

Grade 5

A specific classification for fasteners indicating medium strength, typically made from carbon steel and used in automotive applications.