Sony (Japan) is considering a bond issue. For convenience we will consider 3 year maturity and issue size of $ 1,000,000. The underwriting fees are 4% of par. Issue price is $ 1,000 per bond. Coupon size is $ 100/year (paid annually). Sony wants to hedge using 1) Yen-$ swap or 2) using Yen-$ forwards. Find the following (use 4 decimals or more before rounding): # Annual Swap rates versus six-month US$ LIBOR Pay rate % USD 11.8 Euro 6.00 7.10 Receive Rate % 11.95 6.30 7.40 Yen Foreign Currency Forward Rates. Yen per USD. Hint: Subtract points Bid Offer Spot 254.10 254.20 Points 1 year 7.25 6.95 Points 2 year 18.50 15.50 Points 3 year 30.00 26.50 Points 4 year 40.50 36.00 31) IRRYEN for Sony, with Yen-$ swap is a) 6.79% b) 6.82% c) 7.28% d) 7.72% e) none of the above are within +/-0.01. 32) IRRYEN for Sony, with Yen-$ forwards is a) 6.79% b) 6.82% c) 7.28% d) 7.72% e) none of the above are within +/-0.01. Sony (Japan) is considering a bond issue. For convenience we will consider 3 year maturity and issue size of $ 1,000,000. The underwriting fees are 4% of par. Issue price is $ 1,000 per bond. Coupon size is $ 100/year (paid annually). Sony wants to hedge using 1) Yen-$ swap or 2) using Yen-$ forwards. Find the following (use 4 decimals or more before rounding): # Annual Swap rates versus six-month US$ LIBOR Pay rate % USD 11.8 Euro 6.00 7.10 Receive Rate % 11.95 6.30 7.40 Yen Foreign Currency Forward Rates. Yen per USD. Hint: Subtract points Bid Offer Spot 254.10 254.20 Points 1 year 7.25 6.95 Points 2 year 18.50 15.50 Points 3 year 30.00 26.50 Points 4 year 40.50 36.00 31) IRRYEN for Sony, with Yen-$ swap is a) 6.79% b) 6.82% c) 7.28% d) 7.72% e) none of the above are within +/-0.01. 32) IRRYEN for Sony, with Yen-$ forwards is a) 6.79% b) 6.82% c) 7.28% d) 7.72% e) none of the above are within +/-0.01