The current spot rate for the Polish zloty is 2.5 zlotys per dollar or ($0.40) per zloty.
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The current spot rate for the Polish zloty is 2.5 zlotys per dollar or \($0.40\) per zloty. Party G has access to zlotys at a rate of 7 percent, while party H must pay 8 percent to borrow zlotys. On the other hand, party H can borrow dollars at 9 percent, while party G must pay 10 percent for its dollar borrowings. Party G wishes to obtain \($10\) million in exchange for 25 million zlotys, while party H wants to obtain 25 million zlotys in exchange for \($10\) million. How can these two parties achieve a lower borrowing rate?
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Global Corporate Finance Text And Cases
ISBN: 9781405119900
6th Edition
Authors: Suk H. Kim, Seung H. Kim
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