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Problem 2 a. The Copper Mountain company in Boulder, Colorado (US) borrows 2,000,000 for one year at 5.25% interest. The current exchange rate is 0.79
Problem 2 a. The Copper Mountain company in Boulder, Colorado (US) borrows 2,000,000 for one year at 5.25% interest. The current exchange rate is 0.79 per US dollar. What is the cost (expressed in % terms) of this debt (from the dollar perspective) if the pound depreciated 5%? What is the cost (expressed in % terms) of this debt (from the dollar perspective) if the pound appreciates 5%
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