The exhibit below shows quoted fixed borrowing rates adjuste

The exhibit below shows quoted fixed borrowing rates (adjusted for taxes) in
two different currencies for two different firms:
                        Yen    Pounds
Company A       2%     4%
Company B        3%    5.5%
Which of the following is true?

Question options:

1)

2)

3)

4)

Solution

Ans option A

Company A has comparative advantage in borrowing in both currencies as interest rate company A is getting is less than company B is getting