Question
McDougan Associates, a U.S.-based investment partnership, borrows 100,000,000 at a time when the exchange rate is $1.3500/. The entire principal is to be repaid in
McDougan Associates, a U.S.-based investment partnership, borrows 100,000,000 at a time when the exchange rate is $1.3500/. The entire principal is to be repaid in three years, and interest is 4.50% per annum, paid annually in euros. The euro is expected to appreciate vis vis the dollar at 2% per annum. What is the effective cost of this loan for McDougan?
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An Introduction to Investment Banks, Hedge Funds, and Private Equity
Authors: David P. Stowell
1st edition
978-0123745033, 0123745039, 978-9380931074
