CIMA Exam CIMAPRA19-F03-1 Topic 3 Question 62 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 62
Topic #: 3

ZZZ wishes to borrow at a floating rate and has been told that it can use swaps to reduce the effective interest rate it pays. ZZZ can borrow floating at the risk-free rate + 1, and fixed at 10%.

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

ACompany DDA - it can borrow at risk-free rate + 1 Vz and fixed at 10.5%

BCompany CCA - it can borrow at risk-free rate + Y% and fixed at 9%

CCompany BBA - it can borrow floating at risk-free rate +VA and fixed at 12%

DCompany AAB - it can borrow floating at risk-free rate + % and fixed at 9.5%

Show Suggested Answer

Suggested Answer: B, C, D

by Jeanice at Dec 29, 2022, 06:26 PM

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