Question options 1 2 3 4 5 1 IBM has absolute advantage in b

Question options:

1)

2)

3)

4)

5)

Solution

correct answer : 5) B & C are correct

IBM can borrow in swiss market and thus has advantage of 20 basis point

where as world bank can borrow in US market and has advantage of 5 basis point.

both will lead to overall 25 basis points gain.