Question: Two parties enter a foreign currency swap between USDs and Swiss francs. One USD is currently worth 1.4 Swiss Franc. The American dollar payor will

Two parties enter a foreign currency swap between USDs and Swiss francs. One USD is currently worth 1.4 Swiss Franc. The American dollar payor will provide $560,000. The dollar interest rate is 9%, and the Swiss Franc rate is 8%. Payments will be annual and the swap calls for a life of 3 years.

What will be the total payment in francs by the borrower of dollars for year 3?

a.

$570,000

 b.

$610,400

 c.

$180,000

 d.

$650,000

 e.

$265,000

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