Alternative Investments Real Estate Valuation Question Estate, sorry

Penny-wenny

sorry – figured it out!!!

kim226

3year annualpay currency swap takes place between a New Zealand
company with New Zealand dollars (NZD) and a U.S. company with
u.s. dollars (USD). The New Zealand company swaps NZD for USD on
which it makes endofperiod payments based on the rate in effect at the
beginning of each period. The U.S. company makes fixedrate payments in
NZD.

thisisbrianly

howcome the answer is A..i got B….
fixed rate = 7% which is wat the us comp pays on 2m NZD recieved = 140,000 and..
floating rate = 6% which is wat the new zealand comp will pay on 1m USD recieved = 60,000 so the net payment is from us company to new zealand company of 140,00060,000=80,000…i am missing something here..please help me!!??!!

manasib

you cannot net different ccies us co. pays kiwi. so nz co. pays usd interest end of year 2 based on the rate at the beginning of the year (or end of year 1 = 6 %)