An oil driller recently issued

An oil driller recently issued USD 250 million of fixed-rate debt at 4.0% per annum to help fund a new project.It now wants to convert this debt to a floating-rate obligation using a swap. A swap desk analyst for a largeinvestment bank that is a market maker in swaps has identified four firms interested in swapping their debtfrom floating-rate to fixed-rate. The following table quotes available loan rates for the oil driller and each firm:FirmFixed-rate (in %)Floating-rate (in %)Oil driller4.06-month LIBOR + 1.5Firm A3.56-month LIBOR + 1.0Firm B6.06-month LIBOR + 3.0Firm C5.56-month LIBOR + 2.0Firm D4.56-month LIBOR + 2.5A swap between the oil driller and which firm offers the greatest possible combined benefit?a.Firm Ab.Firm Bc.Firm Cd.Firm D

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