14-12

Suppose the U.S. yield curve is flat at 6% and the euro yield curve is flat at 4%. The current exchange rate is $1.2 per euro. What will be the swap rate on an agreement to exchange currency over a 3-year period? The swap will call for the exchange of 1.8 million euros for a given number of dollars in each year. (Do not round lntermedlete caleulatlons. Enter your answer ln millilons rounded to 4 declmal pleces.)