IBM and Korea Development Bank (KDB): interest rate / currency swap, exchange for yen and substitute Bank of America

Related BrainMass Solutions

• range of possible cost savings

  What will be Nestle's hedged interest expense for the upcoming three-month period? 4. Suppose that IBM would like to borrow fixed-rate yen, whereas Korea Development Bank (KDB) would like to borrow floating-rate dollars.

• Swap Market and Currency Problem

  What will be Nestle's hedged interest expense for the upcoming three-month period? 4. Suppose that IBM would like to borrow fixed-rate yen, whereas Korea Development Bank (KDB) would like to borrow floating-rate dollars.

• International Finance

  What is the range of possible cost savings that IBM can realize through an interest rate/currency swap with KDB? b.

• Swap driven financing the defining features of interest

  EXPOSURE Because of the exchange and re-exchange of notional principal amounts, the currency swap generates a larger credit exposure than the interest rate swap.

• Currency Swap and Spot Exchange Rate

  157051 Currency Swap & Spot Exchange Rate ABC Corp. entered into a currency swap with its bank, providing that ABC borrows $5 million at 10% and swaps for a 12% yen loan. The spot exchange rate is ¥105/$.

• What can we learn about economic development and political risk from the contrasting experiences of East and West Germany, North and South Korea, and communist China and Taiwan, Hong Kong, and Singapore?

  At the time of the sale, the exchange rate was ¥124 = $1. What dollar amount did Disney realize from the sale of its yen proceeds? b. Demonstrate the equivalence between Walt Disney's transaction and a currency swap.

• SWAP

  c) A fixed rate US dollar financing at the rate of 8%, from the BFCE ( the french Export Credit Bank) You have obtained quotations from several banks in Munich for four year SWAP; the best propositions are: - Interest Swap Rate: US Treasury + 75

• Currency Swaps: change in interest rates

  After the swap, the American Bank prefers to make payments in Dollars, and the Japanese Bank prefers to make payments in Yen . All interest payment are annual. An intermediary has concluded a swap deal for both banks.

• International Finance and Transactional Exposure

  For examples, a Swap Bank can broker an interest rate swap deal (for a fee) with Bank A and Company B that will benefit both counterparties. When structured properly all three parties will benefit (Bank A, Company B, and the swap bank).