4. A US company needs to raise 100,000,000. It plans to raise this money by issuing dollar-denominated

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4. A US company needs to raise €100,000,000. It plans to raise this money by issuing dollar-denominated bonds and using a currency swap to convert the dollars to euros. The company expects interest rates in both the United States and the eurozone to fall.

A. Should the swap be structured with interest paid at a fixed or a floating rate?

B. Should the swap be structured with interest received at a fixed or a floating rate?

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Derivatives

ISBN: 9781119850571

1st Edition

Authors: CFA Institute

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