Company X,a Low-Rated Firm,desires a Fixed-Rate,long-Term Loan

question 9

Multiple Choice

Company X,a low-rated firm,desires a fixed-rate,long-term loan.X presently has access to floating interest rate funds at a margin of 1.25% over LIBOR.Its direct borrowing cost is 11% in the fixed-rate bond market.In contrast,company Y,which prefers a floating-rate loan,has access to fixed-rate funds in the Eurodollar bond market at 9% and floating-rate funds at LIBOR + 1/4%.Suppose they split the cost savings.
-How much would X pay for its fixed-rate funds?

• A)9.5%
• B)10.0%
• C)10.5%
• D)10.75%

Identify the key elements that enhance brainwriting sessions and those that do not.

Differentiate between various brainstorming and brainwriting techniques.

Recognize the importance of anonymity and simultaneous participation in electronic brainstorming.

Understand the concepts of probability and strategy in decision-making.

---

Definitions:

Diagnose

The process of identifying, deducing, and addressing issues within a system, machine, or piece of equipment.

Monitor

To observe or track the operation or performance of a system or device, often for the purpose of troubleshooting or optimization.

Error Signal

A signal generated to indicate a discrepancy between a desired outcome and an actual outcome, used for correction in control systems.

Feedback Signal

A signal sent back to the control system from the output, used to correct or adjust the system to maintain desired performance.