Paying fixed rate dollar and receiving fixed rate euro

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 In a currency swap, a dealer is paying fixed rate dollar and receiving fixed rate euro. Suppose that he enters into the swap and immediately thereafter dollar becomes weaker against euro (that is, euro appreciates against dollar) while interest rates in both currencies remain unchanged. What happens to value of the dealer’s swap position?

a. increase

b. decrease

c. no change

d. not enough information to determine

Reference no: EM131027214

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