Question

Question 17 (1 point) KLM Royal Dutch Airlines intends to terminate an ongoing cross currency swap where it swaps $1,000,000 (undesired currency) yearly payments with €900,000 (desired currency) yearly payments with the swap dealer. There are two such yearly payments outstanding along with a principal repayment of $7,000,000 swapped for €6,300,000 due in two years. The current US Dollar interest rate is 2% while the Euro interest rate is 1.8%. The spot exchange rate is €0.92/$. If the cross-currency swap is terminated ______ needs to pay _______ an amount of ____. Swap dealer; KLM; €144,442 OSwap dealer; KLM; €157,003 O KLM; Swap dealer; $144,442 O KLM; Swap dealer; €157,003 O KLM; Swap dealer; €144,442

Answer 1

Answer is : Swap dealer;KLM; $\euro$ 157,003