Aidan’s Cross-Currency Swap: Norwegian Krone for Euros. Aidan Corporation entered into a 3-year crosscurrency interest rate swap to receive euros and pay Norwegian krone. Aidan, however, decided to unwind the swap after one year—thereby having two years left on the settlement costs of unwinding the swap after one year. Repeat the calculations for unwinding, but assume that the following rates now apply.

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Assumptions Notional principal Original spot rate kr/ New (1-year later) spot kr/ Values Swap Rates 3-Year Bid 3-Year Ask 10,000,000 Original: Euro 0.95% 0.98% 9.98 Original: Norwegian krone 2.00% 2.05% 10.08 New fixed euro interest rate 1.00% New fixed Norwegian krone interest rate 2.10%