Question: Fixed Rate Floating Rate Company A 5.50% LIBOR + 1.05% Company B 6.75% LIBOR + 1.75% Assuming comparative advantage and the agree upon rate of

Fixed Rate Floating Rate Company A 5.50% LIBOR + 1.05% Company B 6.75% LIBOR + 1.75% Assuming comparative advantage and the agree upon rate of 6.45%, after entering into an interest rate swap determine the cost of financing for Company A and Company B. Who are the main users of interest swaps and currency swaps? 6. A U.S. investor purchased stock in Toyota, the rate of return on the stock in yen was 8.65% and the yen appreciated by 2.34%, determine the exact total return to the investor.

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