Company a can borrow yen 106 and dollars at 93 company b


Company A can borrow Yen 10.6% and dollars at 9.3%. Company B can borrow yen at 9.1% and dollars at 8.8%. If the financial intermediary charges a fee of .15% what is the gain to each party to the swap. The gain is split evenly between the two parties and the exchange rate risk is assumed by the intermediary.

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Financial Management: Company a can borrow yen 106 and dollars at 93 company b
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