13. ). Consider the situation of firm A and firm B. The current exchange rate is $2.00/ Firm A is a U.S. MNC and wants to borrow 30 million for 2 years. Firm B is a British MNC and wants to borrow $60 million for 2 years. Their borrowing opportunities are as shown, both firms have AAA credit ratings.

	$
A	$	6	%			5	%
B	$	7	%			4	%

Consider firm A could use the forward exchange markets to redenominate a 2-year $60m 6 percent USD loan into a 2-year pound denominated loan. If firm A can do that, what will be the pound cost at the end of second year?

1. 1,766,037.74
2. 30,611,320.75
3. 2,446,153.85
4. 60,823,076.92
5. None of the above