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Q6. Aramco, a Saudi firm, and Shell, a European firm, enter into a five-year currency swap for SR40 million. Let's assume the exchange rate at

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Q6. Aramco, a Saudi firm, and Shell, a European firm, enter into a five-year currency swap for SR40 million. Let's assume the exchange rate at the time is SR5.00/Euro. Assume that the companies make payments annually, beginning one year from the exchange of principal. Assume also that the agreed-upon Euro-denominated interest rate is 7.5%, and the Riyal -denominated interest rate is 2.5%. If, at the one-year mark, the exchange rate is SR4.5/Euro. How much does each company pay and what is the net difference of the two payments

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