Company X Wants to Borrow $10,000,000 Floating for 5 Years;

question 66

Multiple Choice

Company X wants to borrow $10,000,000 floating for 5 years; company Y wants to borrow £5,000,000 fixed for 5 years.The exchange rate is $2 = £1 and is not expected to change over the next 5 years.Their external borrowing opportunities are: A swap bank proposes the following interest-only swap: Company X will pay the swap bank annual payments on $10,000,000 at an interest rate of $9.80%; in exchange the swap bank will pay to company X interest payments on £5,000,000 at a fixed rate of 10.5%.Y will pay the swap bank interest payments on £5,000,000 at a fixed rate of 12.80% and the swap bank will pay Y annual payments on $10,000,000 with the coupon rate of 12%. If company X takes on the swap,what external actions should they engage in?

• A)They should borrow $10,000,000 at $10%
• B)They should borrow £5,000,000 at 10.50% interest-only for five years; translate pounds to dollars at the spot rate.
• C)They should borrow £5,000,000 at £10.50% interest-only for five years; translate pounds to dollars at the spot rate; enter long position in a forward contract to buy £5,000,000 in five years.
• D)None of the above

Grasp the importance of interpersonal relationships and social attitudes in the well-being of older adults.

Understand marital satisfaction and relationship dynamics in late adulthood.

Recognize cultural variations in attitudes towards and responsibilities for the elderly.

Understand the varying impacts of marital and relationship status on well-being in late adulthood.

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Definitions:

Communards

Participants in the Paris Commune, a radical socialist and revolutionary government that briefly ruled Paris in 1871.

Lower-Middle Class

A social class positioned below the upper-middle class, typically comprised of semi-professionals, skilled craftsmen, and lower-level management.

Red Shirts

Volunteers who followed the Italian patriot and general Giuseppe Garibaldi during his campaigns for the unification of Italy in the 19th century.

Giuseppe Garibaldi

An Italian general, patriot, and nationalist who played a key role in the unification of Italy, known for his leadership in the campaign and battles that consolidated different states of the Italian Peninsula into a single nation.