Thornton, ltd needs to invest five million Nepalese rupees in its Nepalese subsidiary to support local operations. Thornton would like its subsidiary to repay the rupees in one year. Thornton would like to engage in a swap transaction. Thus, Thornton would:
A) convert the rupees to pounds in the spot market today and convert rupees to pounds in one year at today's forward rate.
B) convert the pounds to rupees in the spot market today and convert pounds to rupees in one year at the prevailing spot rate.
C) convert the pounds to rupees in the spot market today and convert rupees to pounds in one year at today's forward rate.
D) convert the pounds to rupees in the spot market today and convert rupees to pounds in one year at the prevailing spot rate.
Correct Answer:
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