A firm can borrow at a floating rate of LIBOR + 1% on short-term loans.If it swaps its short-term payments so that it receives LIBOR + 2% and pays a fixed rate of 3%,what is the rate of interest on its borrowing?
A)5%
B)4%
C)6%
D)2%
E)3%

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The Answer of A firm can borrow at a floating rate of LIBOR + 1% on short-term loans.If it swaps its short-term payments so that it receives LIBOR + 2% and pays a fixed rate of 3%,what is the rate of interest on its borrowing?
A)5%
B)4%
C)6%
D)2%
E)3%

A Firm Can Borrow at a Floating Rate of LIBOR