Business
Business, 05.11.2019 05:31, musiclyhollywoodbabo

Toyota would like to borrow in japanese yen at a fixed rate of interest. general motors would like to borrow in us dollars at a fixed rate of interest. the amounts required by the two companies are roughly the same at the current exchange rate. the companies are subject to the following interest rates, which have been adjusted to reflect the impact of taxes.

yendollar

general motors6.0%10.6%
toyota7.5%11.0%

design a swap that will net your bank, acting as intermediary, 45 basis points per annum. make the swap equally attractive to the two companies and ensure that all foreign exchange risk is assumed by the bank. illustrate it with a graph.

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Toyota would like to borrow in japanese yen at a fixed rate of interest. general motors would like t...

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