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Say a US investor with 1mm USD wants to buy a 10Y Volkswagen bond in EUR priced at 100 EUR with a 5% coupon.
First that investor needs to acquire EUR for purchase without exposing themselves to FX risk. To do this they execute a cross-currency swap.
The investor will pay 1mm USD and receive say 1.1mm EUR with the agreed cashflows: he will receive USD 3M ...
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