With reference to the NSPIKLM currency swap discussed in section IV of this chapter:

(a) What is the implied forward exchange rate used throughout the life of the swap for exchanging cash flows?

(b) At the end of year 3 but immediately prior to swapping cash flows as a result of the DG appreciation against the U.S. dollar to 1.80, the interest rate on 3-year DG-denominated bonds has fallen to 4.85%. What is the value of the swap to (1) NSP and (2) KLM?

(c) Using the information provided in (b), discuss a macroeconomic scenario that would increase the value of the currency swap to NSP. What is the new implied forward exchange rate?