Question
An Australian firm needs to borrow 1 million AUD for 1 year. The interest rate in Australia is 7.5 percent and the interest rate in
An Australian firm needs to borrow 1 million AUD for 1 year. The interest rate in Australia is 7.5 percent and the interest rate in the US is 4 percent and the spot exchange rate is AUD/USD= 0.7400. Can the Australian firm achieve lower interest costs by borrowing offshore on a covered basis?
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Credit Derivatives Handbook Global Perspectives Innovations And Market Drivers
Authors: Greg Gregoriou, Paul Ali
1st Edition
0071549528, 978-0071549523
