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You entered a swap agreement a year ago (from 10 million to equivalent dollar debt at $1.1/) under the following conditions offered by the swap

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You entered a swap agreement a year ago (from 10 million to equivalent dollar debt at $1.1/) under the following conditions offered by the swap desk of your bank: $: 6.5% -6.75% against 6-month dollar LIBOR : 5.3% - 5.7% against 6-month dollar LIBOR Now the euro appreciated and the swap desk offers new swap rates: $: 6.6% -6.8% against 6-month dollar LIBOR : 5.2% - 5.6% against 6-month dollar LIBOR Which of the following decisions is the rational choice? Select one: A. close out the current swap and make a net payment. B. you are indifferent between the two swap deals, because the spreads are the same. C. maintain the current swap. D. close out the current swap and receive a net payment. E. the decision depends on the actual value of the euro after the appreciation

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