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We must establish absolute advantage and comparative advantage between 2 counter parties.
Situation (Hypothetical, where either of the parties have better rates in the 2 categories)Party A:
Fixed: 10%; Floating: L+1%Party B:
Fixed: 8%; Floating: L+2%Party A has absolute advantage in floating and comparative in fixed, and vice-versa for Party B. In such a situation, how would the advantages be determined?
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