Question
Unwinding of swap contract. Assume that after one year (exchange of one payment), Sakura decides to unwind the swap agreement. If 2-year fixed rate of
Unwinding of swap contract. Assume that after one year (exchange of one payment), Sakura decides to unwind the swap agreement. If 2-year fixed rate of interest in dollar is now 4.5%, 2-year yen fixed rate is 1.05%, and the spot rate is 112/$. Describe the payment obligations of the two parties (Sakura and the swap dealer) precisely.
To unwind the swap agreement, Sakura needs to pay the swap dealer the net amount of US$907,719.
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To unwind the swap agreement, Sakura receives from the swap dealer the net amount of 98,720,192.
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To unwind the swap agreement, Sakura needs to pay the swap dealer the net amount of US$ 26,289.
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To unwind the swap agreement, Sakura receives from the swap dealer the net amount of 2,944,385.
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