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Currently, Ganado has a fixed-rate Canadian dollar loan taken on two years ago when interest rates were high. What type of interest rate risk, high
Currently, Ganado has a fixed-rate Canadian dollar loan taken on two years ago when interest rates were high. What type of interest rate risk, high or low rates, is Ganado facing? What are some alternatives available to Ganado in managing this particular risk? Be specific with each of these alternatives, such as a long or short position, pay what to receive what, and so on. On another note, Ganado is considering whether it would prefer to make its debt service payments in Swiss francs, as it recently signed a sales contract with a Swiss buyer that will be paying Swiss francs to Ganado over the next few years. What derivatives transaction would help Ganado achieve a natural match of cash inflows with outflows? Be specific: in such transaction, what would Ganado receive? What would it pay
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