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Company A can borrow at a fixed-rate of 9.5% and variable-rate of (prime + 1%). Company...

Company A can borrow at a fixed-rate of 9.5% and variable-rate of (prime + 1%). Company A prefers a fixed rate. Company B can borrow at 8% fixed rate and (prime + 2%) variable. Company B prefers a variable rate. Determine whether an interest rate swap will be beneficial to both parties. ____

A) Yes, because of the positive net quality spread of 2.5%

B) No, because of the negative net quality spread of -0.5%

C) Yes, Because of the positive net quality spread of 0.5%

D) No, because of the zero net quality spread

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