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Observe the fixed annual rates that two firms will pay for financing their $10million, 7-year projects in US dollars (USD) and Australian dollars (AUD):
Observe the fixed annual rates that two firms will pay for financing their $10million, 7-year projects in US dollars (USD) and Australian dollars (AUD): Firm A B Fixed rate USD 5.0% 7.0% Fixed rate AUD 7.5% 8.0% Show an indirect swap in which A and B reduce their cost by the same percentage and without any exchange rate risk to A and B, while SD receives .5% but bears some exchange rate risk.
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Answer Quality Spread Diffrencial 205 15 if both the firm enter in...
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Fundamentals of Futures and Options Markets
Authors: John C. Hull
8th edition
978-1292155036, 1292155035, 132993341, 978-0132993340
