2. (20 points) The spot exchange ce between US dollar and $1.50 Supe U.S. MNC wants...

 

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2. (20 points) The spot exchange ce between US dollar and $1.50€ Supe U.S. MNC wants to finance a €100 million capital expendies of German sobadary In the meantime, a German MNC wants to finance $150 million pepital expenditure of US, wbsidiary. Therefore, both firms wish to face a project in each other's country of same size. Their borrowing opportunities are given in the low U.S.MNC German MNC A swap bank has arranged the following currency swap between US. MNC MNC. $7% U.S. MNC 12% 10% Swap Bank -57 10. €10.5% German MNC €10.5% (1) How much is the total saving that can be split among U.S. MNC, German MNC, and the swap bank? (2) How much are the amount of interest paid (received) each year for U.S. MNC to various parties? How much percentage savings will U.S. MNC benefit? (3) How much are the amount of interest paid (received) each year for German MNC to various parties? How much percentage savings will German MNC benefit? (4) How much are the amount of interest paid (received) each year for the swap bank to various parties? How much percentage savings will the swap bank benefit? 2. (20 points) The spot exchange ce between US dollar and $1.50€ Supe U.S. MNC wants to finance a €100 million capital expendies of German sobadary In the meantime, a German MNC wants to finance $150 million pepital expenditure of US, wbsidiary. Therefore, both firms wish to face a project in each other's country of same size. Their borrowing opportunities are given in the low U.S.MNC German MNC A swap bank has arranged the following currency swap between US. MNC MNC. $7% U.S. MNC 12% 10% Swap Bank -57 10. €10.5% German MNC €10.5% (1) How much is the total saving that can be split among U.S. MNC, German MNC, and the swap bank? (2) How much are the amount of interest paid (received) each year for U.S. MNC to various parties? How much percentage savings will U.S. MNC benefit? (3) How much are the amount of interest paid (received) each year for German MNC to various parties? How much percentage savings will German MNC benefit? (4) How much are the amount of interest paid (received) each year for the swap bank to various parties? How much percentage savings will the swap bank benefit?

Answer rating: 100% (QA)

Based on the information provided we can calculate the following 1 The total saving that can be spli... View the full answer