Question 3: (16 marks) The CEO considers the investment in South Africa by entering into an agreement with Electo Co to expand the existing plant by investing ZAR 120,000,000. The CEO believes Mid Tech should borrow the funds in US$ at a fixed rate from a bank in the U.S.A. and convert it into ZAR for investment. For this purpose a 5 year (60 month) currency swap transaction will be required. He wants to be provided with a 5 year currency swap proposal. Also depict the swap graphically for the CEO to see how the swap will work. Workings: ZAR to be invested: Spot exchange rate to purchase ZAR for investment: Borrowing rate in U.S.A. to be used: Show the figures that should be applied in this column Value in US$ to be borrowed: Swap transaction: In which currency is the swap payment? e.g. in US$ or ZAR State whether the payment is Fixed or Libor MidTech pays swap bank MidTech pays swap bank MidTech receives from swap bank MidTech receives from swap bank Marks 1 mark 1 mark 1 mark State the percentage (%) of the payment 1 mark Marks 1 mark 1 mark 1 mark 1 mark