) WITH RESPECT TO VIEWMONT'S GOAL OF BORROWING AT THE LOWEST COST AND HEDGING CURRENCY RISK, WHO IS MOST LIKELY CORRECT

5.) With respect to Viewmont's goal of borrowing at the lowest cost and hedging currency

risk, who is most likely correct?

A.

Kemigisa

B.

Bazlamit

C.

Montero

Answer = C

Montero is correct. Viewmont can reduce its overall borrowing costs by borrowing in

U.S. dollars and engaging in a currency swap for Brazillian reals. This swap not only

reduces borrowing costs but also hedges currency exposure.

“Risk Management Applications of Swap Strategies,” by Don M. Chance