You borrow nok 100m at 10 percent for seven years, and you swap the loan into nzd
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You borrow nok 100m at 10 percent for seven years, and you swap the loan into nzd at a spot rate of nok/nzd 4 and the seven-year swap rates of 7 percent (nzd) and 8 percent (nok). What are the payments on the loan, on the swap, and on the combination of them? Is there a gain if you could have borrowed nzd at 9 percent?
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Thus the 2 percent spread on nzd 25m in a direct fixedrate loan is replaced by the 2 ...View the full answer
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Related Book For
International Finance Putting Theory Into Practice
ISBN: 978-0691136677
1st edition
Authors: Piet Sercu
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