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Consider the dollar- and euro-based borrowing opportunities of companies A and B. Euro Borrowing : A - euro 7% B- euro 6% $ borrowing- A-
Consider the dollar- and euro-based borrowing opportunities of companies A and B.
Euro Borrowing : A - euro 7% B- euro 6%
$ borrowing- A- $ 10% B 9%
A is U.S. -based MNC with AAA credit; B is an Italian firm with AAA credit. Firm A wants to borrow euro 1,000,000 for one year and B wants to borrow $2,000,000 for one year. Is there a mutually beneficial swap?
a. No, Savings=0
b. Yes Savings= 0.5%
c. Yes Savings = 1%
d. Yes, Savings 2%
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