Consider the dollar- and euro-based borrowing opportunities of companies A and B.A is a U.S.-based MNC with AAA credit; B is an Italian firm with AAA credit. Firm A wants to borrow 1,000,000 for one year and B wants to borrow $2,000,000 for one year. The spot exchange rate is $2.00 = 1.00 and the one-year forward rate is given by IRP as $2.0377/1. Is there a mutually beneficial swap? Company A Company B Euro borrowing 6% 6% USD borrowing $8% $8% | 0 Yes, QSD = 2% | 0 No, QSD = 0 | 0 Yes,QSD=4% Consider the dollar- and euro-based borrowing opportunities of companies A and B.A is a U.S.-based MNC with AAA credit; B is an Italian firm with AAA credit. Firm A wants to borrow 1,000,000 for one year and B wants to borrow $2,000,000 for one year. The spot exchange rate is $2.00 = 1.00 and the one-year forward rate is given by IRP as $2.0377/1. Is there a mutually beneficial swap? Company A Company B Euro borrowing 6% 6% USD borrowing $8% $8% | 0 Yes, QSD = 2% | 0 No, QSD = 0 | 0 Yes,QSD=4%