Smith Brothers has a floating-rate loan based on the LIBOR rate. The Three Sisters has a floating-rate loan based on the Treasury bill. The Smith Brothers would prefer a loan based on the T-bill and the Three Sisters would prefer a loan based on LIBOR, but neither have been able to obtain the loan they prefer. These two firms would most likely benefit if they entered a(n):
A) Interest rate swap.
B) Exchange rate swap.
C) Commodity swap.
D) Forward contract on the dollar-pound exchange rate.
E) Futures contract on the dollar-pound exchange rate.
