Essay
Consider the situation of firm A and firm B.The current exchange rate is $1.50/€.Firm A is a U.S.MNC and wants to borrow €40 million for 2 years.Firm B is a French MNC and wants to borrow $60 million for 2 years.Their borrowing opportunities are as shown; both firms have AAA credit ratings.
Devise a direct swap for A and B that has no swap bank.Show their external borrowing.
Correct Answer:

Verified
Correct Answer:
Verified
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