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Exam F3 All Questions
Exam F3 All Questions

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CIMA Strategic F3 Question # 37 Topic 5 Discussion

F3 Exam Topic 5 Question 37 Discussion:
Question #: 37
Topic #: 5

Z wishes to borrow at a floating rate and has been told that it can use swaps to reduce the effective interest rate it pays. Z can borrow floating at Libor ' 1, and fixed at 10%.

Which of the following companies would be the most appropriate for Z to enter into a swap with?


A.

Company A - it can borrow floating L +1 ½ and fixed at 9.5%


B.

Company D - it can borrow at L +1 ½ and fixed at 10.5%


C.

Company C - it can borrow at L +1 ½ and fixed at 9%


D.

Company E - it can borrow floating at L +1 ½ and fixed at 12%


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