The swap desk at UBS is quoting the following rates on 5-year swaps versus 6-month dollar LIBOR: U.S. Dollars: 8.75% bid and 8.85% offered Swiss Francs: 5.25% bid and
5.35% offered You would like to swap out Swiss franc debt with a principal of CHF25,000,000 and into fix-rate dollar debt. At what rate will UBS handle the
transaction? If the current EXCHANGE RATE is CHF1.3/$, what would the cash flow be?

 

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