Suppose that the swap that you proposed in question 2 is now 4 years old (i.e.there is exactly one year to go on the swap).If the spot exchange rate prevailing in year 4 is $1.8778 = €1 and the 1-year forward exchange rate prevailing in year 4 is $1.95 = €1,what is the value of the swap to the party paying dollars? If the swap were initiated today the correct rates would be as shown: 
Consider the situation of firm A and firm B.The current exchange rate is $1.50/€.Firm A is a U.S.MNC and wants to borrow €40 million for 2 years.Firm B is a French MNC and wants to borrow $60 million for 2 years.Their borrowing opportunities are as shown; both firms have AAA credit ratings.
Definitions:
Depressant
A substance that reduces arousal or stimulation in various parts of the brain, often used to treat anxiety or insomnia.
Barbiturates
A class of drugs that are used as sedatives and hypnotics, and also for the treatment of epilepsy and insomnia, but have a high potential for abuse and addiction.
Mescaline
A psychedelic compound derived from the peyote cactus, known for its hallucinogenic effects, used both in traditional spiritual ceremonies and recreationally.
Consciousness
A state of awareness of oneself and the environment.
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