Question

6

3 pts Company A can borrow yen at 147 percent and dollars at 137 percent. Company B can borrow yen at 13.7 percent and dollars at 13.367 percent. If a financial intermediary charges a fee of 0.11 percent, what is the gain to each party to the swap. The gain is evenly split between the two parties and exchange rate risk assumed by the intermediary. 0.28333 percent 0.56667 percent ang 0.33333 percent 0.38333 percent app honorock.com is staring you somer

Answer 1

V14 -D1212 A B C D E F G H AWNA Dollar 13.700% 13.367% Yen 14.700% 13.700% B can comparatively borrow yen cheaper BBO00 v B borrows in yen and A borrows in dollar and exchane Gain = [ 14.700% + 13.367%] - [ 13.700% +13.700%] - .1% Gain = 0.5667% 12 13 14 15 Share 0.28333%