ABC CorpBorrows $5 Million at 10% from a Bank and Swaps

question 71

Multiple Choice

ABC Corp.borrows $5 million at 10% from a bank and swaps this loan for a 12% yen loan.The spot exchange rate is JPY105 = USD1.How much does ABC pay annually to the bank?

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

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