Walmart would like to borrow $2,500,000 and can borrow at £6.04% or $8.15%. A Swap Bank quotes GBP (6.04 - 7.14%) and USD (7.00 -7.71%). How much will Walmart save if it enters a currency swap agreement? [note: your answer should be in dollars]

Walmart would like to borrow $2,500,000 and can borrow at £6.04% or $8.15%. A Swap Bank quotes GBP (6.04 - 7.14%) and USD (7.00 -7.71%). How much will Walmart save if it enters a currency swap agreement? [note: your answer should be in dollars]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Walmart would like to borrow $2,500,000 and can borrow at £6.04% or $8.15%. A Swap Bank quotes
GBP (6.04 -7.14%) and USD (7.00 -7.71%). How much will Walmart save if it enters a currency swap
agreement? [note: your answer should be in dollars]

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