South Korean firm is able to obtain a three-year loan inSouth Korean Won (KRW) at a fixed yearly rate of 2.75%. A US firm is able to borrow US dollars also for three years at a fixed yearly rate of 1.25% . The US firms has a subsidiary in South Korea and needs KRW 4 trillion. The current exchange rate is KWR 1,140/ US$. The two firms agree a currency swap.

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