22.11. Disney wants to borrow 24 million for three years while Metallgesellschaft wants to borrow US$20 million
Question:
22.11. Disney wants to borrow €24 million for three years while Metallgesellschaft wants to borrow US$20 million for three years. The spot exchange rate is currently €1.20/$. Suppose Disney and Metallgesellschaft can borrow Euros and dollars from their domestic banks at the following
(annual) fixed interest rates.
US$ €
Disney 6.0% 9.7%
Metallgesellschaft 8.4 10.0 Design a currency swap agreement that will benefit both firms and also yield a 0.4 percent profit for the bank acting as an intermediary for the swap.
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Related Book For 
Financial Markets And Corporate Strategy
ISBN: 9780071157612
2nd Edition
Authors: Mark Grinblatt, Sheridan Titman
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