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Unilever (UK firm) would like to borrow USD, and Coca-Cola (US firm) wants to borrow GBP. Coca-Cola can borrow USD at 6.50% and GBP at 8%. Unilever can borrow USD at 7% and GBP at 7%. Supposing the maturity of their loans is 5 years, what is the annual savings expressed in basis points (bps) in their respective cost of borrowing if they arrange a swap and do not share their cost savings with each other? O a. Coca-Cola (100bps), Unilever (50bps) O b. Coca-Cola (75bps), Unilever (75bps) O c. Coca-Cola (100bps), Unilever (100bps) O d. Coca-Cola (50bps), Unilever (50bps) O e. None of the options in this question are correct.

Unilever (UK firm) would like to borrow USD, and Coca-Cola (US firm) wants to borrow GBP. Coca-Cola can borrow USD at 6.50% and GBP at 8%. Unilever can borrow USD at 7% and GBP at 7%. Supposing the maturity of their loans is 5 years, what is the annual savings expressed in basis points (bps) in their respective cost of borrowing if they arrange a swap and do not share their cost savings with each other? O a. Coca-Cola (100bps), Unilever (50bps) O b. Coca-Cola (75bps), Unilever (75bps) O c. Coca-Cola (100bps), Unilever (100bps) O d. Coca-Cola (50bps), Unilever (50bps) O e. None of the options in this question are correct.

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Unilever (UK firm) would like to borrow USD, and Coca-Cola (US firm) wants to borrow GBP. Coca-Cola can borrow USD at 6.50% and GBP at 8%. Unilever can borrow USD at 7% and GBP at 7%. Supposing the maturity of their loans is 5 years, what is the annual savings expressed in basis points (bps) in their respective cost of borrowing if they arrange a swap and do not share their cost savings with each other? а. Соса-Сola (100bps), Unilever (50bps) b. Coca-Cola (75bps), Unilever (75bps) С. Coca-Cola (100bps), Unilever (100bps) d. Coca-Cola (50bps), Unilever (50bps) е. None of the options in this question are correct.
Transcribed Image Text:Unilever (UK firm) would like to borrow USD, and Coca-Cola (US firm) wants to borrow GBP. Coca-Cola can borrow USD at 6.50% and GBP at 8%. Unilever can borrow USD at 7% and GBP at 7%. Supposing the maturity of their loans is 5 years, what is the annual savings expressed in basis points (bps) in their respective cost of borrowing if they arrange a swap and do not share their cost savings with each other? а. Соса-Сola (100bps), Unilever (50bps) b. Coca-Cola (75bps), Unilever (75bps) С. Coca-Cola (100bps), Unilever (100bps) d. Coca-Cola (50bps), Unilever (50bps) е. None of the options in this question are correct.
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