ABC CorpEntered into a Currency Swap with Its Bank, Providing That

question 113

Multiple Choice

ABC Corp.entered into a currency swap with its bank, providing that ABC borrows $5 million at 10 percent and swaps for a 12 percent yen loan.The spot exchange rate is ¥105/$.If interest only is to be repaid on an annual basis, how much does ABC pay annually to the bank? (answer in millions)

• A)¥1.26 million
• B)¥5.71 million
• C)¥52.50 million
• D)¥63.00 million

---

Definitions:

Vichy Regime

The government of unoccupied France during World War II, collaborating with Nazi Germany from 1940 to 1944.

General Franco

A Spanish military leader who ruled as a dictator over Spain from 1939 until his death in 1975, after winning the Spanish Civil War.

Fascism

A far-right, authoritarian ultranationalism characterized by dictatorial power, forcible suppression of opposition, and strong regimentation of society and the economy.

Manchuria

A historical region in Northeast Asia, rich in resources and strategically important, often contested and occupied by various powers such as China, Russia, and Japan throughout history.