Individual Homework-5

Individual Homework-5 - answer 1 and 2, we will calculate...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
3. EXTRA ANSWERS The above-mentioned statements is not a realistic practice of a basic currency swap, it is necessary to recognize the bid-ask spread that the swap bank charges for creating a market in currency swaps. It also superficially appears that the Spanish MNC is not saving as much a deal from the currency swap as Centralia Corporation. To extend the
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: answer 1 and 2, we will calculate the equivalency of currency swap cash flow to finalize equivalent of borrowing euros (dollars) in short term. We also assume that the swap bank is quoting eight-year dollar (euro) currency swaps at certain percents against LIBOR flat and that the swap bank can deal with Centralia Corporation and the Spanish MNC separately....
View Full Document

Ask a homework question - tutors are online