What Rate Would Company a Have to Pay on Its

question 23

Multiple Choice

What rate would company A have to pay on its floating rate debt so that an interest rate swap would no longer benefit each party?

• A)LIBOR 0.5
• B)LIBOR
• C)LIBOR + 0.5
• D)An interest swap is always beneficial for both parties involved

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Definitions:

Irrational

Lacking the ability to reason or apply logical thought, often leading to actions or beliefs that lack sense or sound judgment.

Unintelligent

Lacking intelligence, understanding, or insight; displaying a lack of smart or sensible thinking.

Bad Faith

A concept in existentialist philosophy referring to self-deception or lying to oneself, often to avoid facing uncomfortable truths.

Jean-Paul Sartre

A French philosopher, playwright, novelist, and political activist from the 20th century, recognized for his work in existentialism and phenomenology.