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(A) Wished to borrow Japanese yen at a fixed rate of Interest. The amount required by the two companies are roughly same at the current
(A) Wished to borrow Japanese yen at a fixed rate of Interest. The amount required by the two companies are roughly same at the current exchange rate. The companies have been quoted the following rates: I Company Yen Dollar Amron 4.00% 8.60% Lumex 5.50% 9.00% Design a swap that will give 50 basis points per annum to intermediary. Make the swap equally attractive to the two companies and ensure that all foreign exchange risk is assumed by the bank
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