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1. The following is information pertaining to a currency Swap for the Indian Rupee (INR) and British Pound (GBP) for a 7%, 10 year maturity
1. The following is information pertaining to a currency Swap for the Indian Rupee (INR) and British Pound (GBP) for a 7%, 10 year maturity swap. The spread is +/- 15 basis points, and the exchange rate is INR 50 per GBP. Also, the fixed rate applies to the INR and the variable LIBOR flat rate applies to the GBP. A British firm has borrowed GBP 10 million at a variable rate on the pound of LIBOR + 20 basis points, and wants to swap according to the terms above. What will be its new financing terms, including the net interest costs of the swap? 1. The following is information pertaining to a currency Swap for the Indian Rupee (INR) and British Pound (GBP) for a 7%, 10 year maturity swap. The spread is +/- 15 basis points, and the exchange rate is INR 50 per GBP. Also, the fixed rate applies to the INR and the variable LIBOR flat rate applies to the GBP. A British firm has borrowed GBP 10 million at a variable rate on the pound of LIBOR + 20 basis points, and wants to swap according to the terms above. What will be its new financing terms, including the net interest costs of the swap
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