A french company enters into a currency swap in which it, Ask an Expert

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A French company enters into a currency swap in which it pays a fixed rate of 6% in dollars and the counterparty pays a fixed rate of 5% in euros. The notional principals are €25 million and $40 million. Payments are made semiannually and on the basis of 30 days per month and 360 days per year.

Which of the following statements is correct? At swap initiation:

A no money is exchanged.

B the counterparty pays €25 million to the French company.

C the French company pays €25 million to the counterparty.

D the French company pays $40 million to the counterparty.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92428230

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