Siam Cement suffered enormous losses during the Asian currency crisis in 1997. When the Thai Baht was devalued from B25.5/$, Siam's interest payments were over $900 million on its outstanding dollar debt (with an average interest rate of 8.1% on its U.S. dollar debt at that time). Assuming Siam took out $53 million in debt in June 1997 and at 8.01% interest, and had to repay it in one year when the spot had risen to B42.2/$, what was the foreign exchange loss incurred on the transaction? $956,793,100 $955,996,510 B855,996,510 B956.793.100
Siam Cement suffered enormous losses during the Asian currency crisis in 1997. When the Thai Baht was devalued from B25.5/$, Siam's interest payments were over $900 million on its outstanding dollar debt (with an average interest rate of 8.1% on its U.S. dollar debt at that time). Assuming Siam took out $53 million in debt in June 1997 and at 8.01% interest, and had to repay it in one year when the spot had risen to B42.2/$, what was the foreign exchange loss incurred on the transaction? $956,793,100 $955,996,510 B855,996,510 B956.793.100
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Siam Cement suffered enormous losses during the Asian currency crisis in
1997. When the Thai Baht was devalued from B25.5/$, Siam's interest
payments were over $900 million on its outstanding dollar debt (with an
average interest rate of 8.1% on its U.S. dollar debt at that time). Assuming
Siam took out $53 million in debt in June 1997 and at 8.01% interest, and had
to repay it in one year when the spot had risen to B42.2/$, what was the
foreign exchange loss incurred on the transaction?
$956,793,100
$955,996,510
B855,996,510
B956,793,100
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