PPT Slide

Use of a currency swap to enhance yield

Direct

Synthetic

US Treasury notes

German govt bonds

8.14%

(US$)

8.45%

(DM)

Investor

Investor

8.45%

(DM)

8.14%

(US$)

Swap house

Yield pickup

= 8.51% - 8.14%

= 0.37%

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