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(5 points) You want to enter into a six-month spot-forward swap on a notional S14 million. The spot exchange rate is 1.35 USD/GBP. The US

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(5 points) You want to enter into a six-month spot-forward swap on a notional S14 million. The spot exchange rate is 1.35 USD/GBP. The US interest rate is 3.4%, and the UK interest rate is 2.1%. a. What is the appropriate forward rate (using international parity conditions)? What are the cash flows that would take place today? What are the cash flows that would take place in six months? What is the implied interest rate on your UK borrowing? b. c. d. (5 points) You want to enter into a six-month spot-forward swap on a notional S14 million. The spot exchange rate is 1.35 USD/GBP. The US interest rate is 3.4%, and the UK interest rate is 2.1%. a. What is the appropriate forward rate (using international parity conditions)? What are the cash flows that would take place today? What are the cash flows that would take place in six months? What is the implied interest rate on your UK borrowing? b. c. d

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