Morning Star Air (China). Morning Star Air, headquartered in Kunming, China, needs US $22,000,000 for one year to finance working capital. The airline has two alternatives for borrowing: a. Borrow US $22,000,000 in Eurodollars in London at 7.35% per annum b. Borrow HK $175,018,800 in Hong Kong at 7.15% per annum, and exchange these Hong Kong dollars at the present exchange rate of HK\$7.9554/US\$ for U.S. dollars. At what ending exchange rate would Morning Star Air be indifferent between borrowing U.S. dollars and borrowing Hong Kong dollars