Suppose that Delta wants to borrow 32 million CAD and Air Canada wants to borrow 24...
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Suppose that Delta wants to borrow 32 million CAD and Air Canada wants to borrow 24 million USD. Each firm is offered the following loan rates. Firm Delta 1:41 Air Canada U.S. Bank Rate (USD) 5.7% 6.3% Canadian Bank Rate (CAD) 6.8% 7.1% Design a swap where a financial intermediary gets 0.08% of margin and takes all the exchange rate risk. Each firm evenly splits the remaining spread margin. As a result of the swap, at what rate is Air Canada effectively borrowing in USD? Use the Currency Swap Template to answer the question. Please report your answer in percentage. 7.22% would be 7.22. Numeric Response Prev 14 of 33 # Next > Suppose that Delta wants to borrow 32 million CAD and Air Canada wants to borrow 24 million USD. Each firm is offered the following loan rates. Firm Delta 1:41 Air Canada U.S. Bank Rate (USD) 5.7% 6.3% Canadian Bank Rate (CAD) 6.8% 7.1% Design a swap where a financial intermediary gets 0.08% of margin and takes all the exchange rate risk. Each firm evenly splits the remaining spread margin. As a result of the swap, at what rate is Air Canada effectively borrowing in USD? Use the Currency Swap Template to answer the question. Please report your answer in percentage. 7.22% would be 7.22. Numeric Response Prev 14 of 33 # Next >
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