Return to ques A British bank issues a $190 million, three-year Eurodollar CD at a fixed annual rate of 8 percent. The proceeds of the CD are lent to a British company for three years at a fixed rate of 10 percent. The spot exchange rate of pounds for US dollars is 150/USS. -1. Is this expected to be a profitable transaction ex ante? a-2. What are the cash flows if exchange rates are unchanged over the next three years? b. If the US dollar is expected to appreciate against the pound to 165/91, 41815/$1, and $2.00/$1 over the next three years, respectively, what will be the cash flows on this transaction? c. If the British bank swaps US dollar payments for British pound payments at the current spot exchange rate, what are the cash flows on the swap and on the entire hedged position? Assume that the US dollar appreciates at the same rates as in part (6) Answer is not complete. Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required C Is this expected to be a profitable transaction ex ante? Return to C 3 respectively. what will be the cash flows on this transaction? c. If the British bank swaps US dollar payments for British pound payments at the current spot exchange rate, what are the cash flows on the swap and on the entire hedged position? Assume that the US dollar appreciates at the same rates as in part (0) Answer is not complete. Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required ho Is this expected to be a profitable transaction ex ante? is this expected to be a profitable transaction ex ante? Yos Required A2 > Answer is not complete. Complete this question by entering your answers in the tabs below. Required A1 Reguled A2 Required B Required What are the cash flows if exchange rates are unchanged over the next three years? (Do not round Intermediate calculations. Enter your answers in millions rounded to 2 decimal places. (eig 32.16) British Loan 1 1 Eurodollar CD Cash Outflow (U.S.5) 15 20 milion 15.20 million 15, 20 3 milion (0) 22 80 million 22 80 million 22 80 milion 2 3 Cash Indlowie) 28.50 million 28. 50 min 22 50 Spread (6) 5.70 Wilion 5.70 million 5.70 milion Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 3 Complete this question by entering your answers in the tabs below. Required Al Required A2 Required B Required If the U.S. dollar is expected to appreciate against the pound to 1,65/51, E1.815/$1, and 2.00/51 over the next three years, respectively, what will be the cash flows on this transaction? (Negative amounts should be indicated by a minus sign. Do not found intermediate calculations. Enter your answers in millions rounded to 2 decimal places, (e.g. 32.16)) British Loan = Eurodollar CD Cash Outflow (U.S.S) 15 20 million 1520 million 15 20 million (E) 25.08 million 27 59 million 30 40 million Cash inflow (E) 3135 3 milion 34 49 milion 38.00 3 milion () 6.27 milion 6.90 million 7.60 million Return to question Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required If the British bank swaps U.S. dollar payments for British pound payments at the current spot exchange rate, what are the cash flows on the swap and on th entire hedged position? Assume that the U.S. dollar appreciates at the same rates as in part (b). (Do not round Intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (0.932.16) 1 2 3 Cash Flow () 15-20 milion 15-20 milion 1520 milion Swap Payments (6) million million milion Net Swap Cash Flow (C) nition million million Total Cash Flow (E) million million million Answer is not complete. Complete this question by entering your answers in the tabs below. Required A1 Reguled A2 Required B Required What are the cash flows if exchange rates are unchanged over the next three years? (Do not round Intermediate calculations. Enter your answers in millions rounded to 2 decimal places. (eig 32.16) British Loan 1 1 Eurodollar CD Cash Outflow (U.S.5) 15 20 milion 15.20 million 15, 20 3 milion (0) 22 80 million 22 80 million 22 80 milion 2 3 Cash Indlowie) 28.50 million 28. 50 min 22 50 Spread (6) 5.70 Wilion 5.70 million 5.70 milion Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 3 Complete this question by entering your answers in the tabs below. Required Al Required A2 Required B Required If the U.S. dollar is expected to appreciate against the pound to 1,65/51, E1.815/$1, and 2.00/51 over the next three years, respectively, what will be the cash flows on this transaction? (Negative amounts should be indicated by a minus sign. Do not found intermediate calculations. Enter your answers in millions rounded to 2 decimal places, (e.g. 32.16)) British Loan = Eurodollar CD Cash Outflow (U.S.S) 15 20 million 1520 million 15 20 million (E) 25.08 million 27 59 million 30 40 million Cash inflow (E) 3135 3 milion 34 49 milion 38.00 3 milion () 6.27 milion 6.90 million 7.60 million Return to question Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required If the British bank swaps U.S. dollar payments for British pound payments at the current spot exchange rate, what are the cash flows on the swap and on th entire hedged position? Assume that the U.S. dollar appreciates at the same rates as in part (b). (Do not round Intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (0.932.16) 1 2 3 Cash Flow () 15-20 milion 15-20 milion 1520 milion Swap Payments (6) million million milion Net Swap Cash Flow (C) nition million million Total Cash Flow (E) million million million