We have USD 100MM to invest. Because of the currency composition of your benchmark you do not want to take on additional non-USD risk. Spot exchange rate is 1.20 USD/EUR.

--- You are considering purchasing a 5-year USD bond of Ford which carries an annual coupon of 10 1/8 % in USD. 5 years maturity.

--- Ford has issued bonds in several international markets, including the Eurozone. Five-year 6 3/8% Euro coupon bonds of Ford are selling at 98.75 in the Eurozone. 5 years maturity.

Swap rate against bid ask USD libor:

Bid/Ask USD: 8.98/9.03

Bid/Ask EUR: 5.42/5.5

What bond will you buy, ie. will you buy the USD bond or will you buy the EUR bond and swap the cash flows to USD? In order to answer this, please compute the USD yield of the EUR bond after having swapped the cash flows to USD.