The currency swap has 3 years to expire. Agreement assumes the exchange of the following payments:...
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The currency swap has 3 years to expire. Agreement assumes the exchange of the following payments: ACB pays to BIDV 14% from GBP 20 million, while BIDV pays to ACB 10% from USD 30 million. The term structure of interest rates is flat in both the United Kingdom and the United States. At present, US rates are 8%, and Great Britain rates are 11% Interest is paid once a year. The current exchange rate is 1.65 USD =1 GBP. What is the value of the swap for the company ACB and for the company BIDV? . The currency swap has 3 years to expire. Agreement assumes the exchange of the following payments: ACB pays to BIDV 14% from GBP 20 million, while BIDV pays to ACB 10% from USD 30 million. The term structure of interest rates is flat in both the United Kingdom and the United States. At present, US rates are 8%, and Great Britain rates are 11% Interest is paid once a year. The current exchange rate is 1.65 USD =1 GBP. What is the value of the swap for the company ACB and for the company BIDV? .
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ANS WER The value of the swap for the company AC B is 1 244 000 GB P and the value of the swap for t... View the full answer
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Posted Date:
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