Q.4186 Assume that two parties enter a five -year FX currency swap for 100 million. Party, A is a US firm, while the other, B, is a European firm. The EUR/USD exchange rate is $1.25 by the time the swap is arranged. In other words, the dollar is EUR 0.8. The start of the swap is December 31st, 2019. On this date, A pays B $100m, while B pays A EUR 80m. Assume that the agreed dollar interest rate is 6%, while the euro interest rate is 3.5%. Calculate the amount that company A pays annually to company B. | Financial Risk Manager Part 2 Quiz - LeetQuiz