Thornton, Inc. 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 dollars in the spot market today and convert rupees to dollars in one year at today's forward rate.
B) convert the dollars to rupees in the spot market today and convert dollars to rupees in one year at the prevailing spot rate.
C) convert the dollars to rupees in the spot market today and convert rupees to dollars in one year at today's forward rate.
D) convert the dollars to rupees in the spot market today and convert rupees to dollars in one year at the prevailing spot rate.
Correct Answer:
Verified
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