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Test Content Question 1 3 Points In their respective markets, Alpha can borrow at 11.3% and Libor while Beta can borrow at 13.6% and Libor + 1%. The swap bank is quoting five-year dollar interest rate swaps at 12.3-11.6 percent against LIBOR. a. What is the net gain (in percentage) to Alpha? b. Calculate the quality spread differential (QSD). c. Do you think the QSD was split fairly? Why or why not? A Use the editor to format your answer
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