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please do it in 25 minutes please urgently... I'll give you up thumb definitely Consider a fixed-for-fixed currency swap. Firm A is a U.S.-based multinational.
please do it in 25 minutes please urgently... I'll give you up thumb definitely
Consider a fixed-for-fixed currency swap. Firm A is a U.S.-based multinational. Firm B is a U.K.based multinational. Firm A wants to finance a 32 million expansion in Great Britain. Firm B wants to finance a $64 million expansion in the U.S. The spot exchange rate is 1.00=$2.00. Firm A can borrow dollars at 12 percent and pounds sterling at 14 percent. Firm B can borrow dollars at 7 percent and pounds sterling at 9 percent. Which of the following swaps is mutually beneficial to each party and meets their financing needs? Neither party should face exchange rate risk. There is no mutually beneficial swap that has neither party facing exchange rate risk. Firm A should borrow $32 million in dollars, pay 13 percent in pounds to Firm B, who in turn borrows 64 million and pays 6 percent in dollars to A. None of the other answers. Firm A should borrow $64 million in dollars, pay 13 percent in pounds to Firm B, who in turn borrows 32 million and pays 10 percent in dollars to A. Firm A should borrow $64 million in dollars, pay 13 percent in pounds to Firm B, who in turn borrows 32 million and pays 6 percent in dollars to A. Consider a fixed-for-fixed currency swap. Firm A is a U.S.-based multinational. Firm B is a U.K.based multinational. Firm A wants to finance a 32 million expansion in Great Britain. Firm B wants to finance a $64 million expansion in the U.S. The spot exchange rate is 1.00=$2.00. Firm A can borrow dollars at 12 percent and pounds sterling at 14 percent. Firm B can borrow dollars at 7 percent and pounds sterling at 9 percent. Which of the following swaps is mutually beneficial to each party and meets their financing needs? Neither party should face exchange rate risk. There is no mutually beneficial swap that has neither party facing exchange rate risk. Firm A should borrow $32 million in dollars, pay 13 percent in pounds to Firm B, who in turn borrows 64 million and pays 6 percent in dollars to A. None of the other answers. Firm A should borrow $64 million in dollars, pay 13 percent in pounds to Firm B, who in turn borrows 32 million and pays 10 percent in dollars to A. Firm A should borrow $64 million in dollars, pay 13 percent in pounds to Firm B, who in turn borrows 32 million and pays 6 percent in dollars to AStep by Step Solution
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