Question: Please show all work. Suppose the U.S. yield curve is flat at 6% and the euro yield curve is flat at 4%. The current exchange

Please show all work.

Suppose the U.S. yield curve is flat at 6% and the euro yield curve is flat at 4%. The current exchange rate is $1.3 per euro. What will be the swap rate on an agreement to exchange currency over a 3-year period? The swap will call for the exchange of 2.7 million euros for a given number of dollars in each year.

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