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please attached photo Question 8 The table below presents the costs of borrowing for FaceBook and Caterpillar in Euros and Yens, and the quotes for

please attached photo

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Question 8 The table below presents the costs of borrowing for FaceBook and Caterpillar in Euros and Yens, and the quotes for interest swaps in Euros and Yens, both quoted againstLIBOR. FaceBook would like to get a xed rate Yen loan. Caterpillar would like to get a xed rate Euro loan. How much can FaceBook save by entering a currency swap agreement? Borrowing Cost in Yen Borrowing Cost in Euros FaceBook 2.00% 10.90% Caterpillar 2.75% 10.00% Swap Bank Quote EUR JPY Bid Ask Bid Ask 2.00% 2.10% 10.00% 10.09% O 75 bps O 81 bps O 90 bps O 65 bps 0 None of the alternatives

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