Question: Part 2 Derivatives 50 pts 4. Please explain in words, and show using boxes & arrows how a cross currency swap would work using the

Part 2 Derivatives 50 pts

4. Please explain in words, and show using boxes & arrows how a cross currency swap would work using the following details 15 pts

a. US Borrower: XOM borrowing 5B at an interest rate of 5%

b. UK Borrower: BP borrowing $3B at an interest rate of 4% This is more of an open-ended question Im expecting how you will build up this strategyso feel free to assume what you want to

6. In the world of interest rates, what kinds of instruments are available? 5 pts

7. How is the fixed rate in an FRA determined? 5 pts

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