Question
(16) (Currency Swap) Assume IBM engages in a 3-year currency swap with Barclays, in which IBM pays a FIXED rate=3.4% in British Pounds, and Barclays
(16) (Currency Swap) Assume IBM engages in a 3-year currency swap with Barclays, in which IBM pays a FIXED rate=3.4% in British Pounds, and Barclays pays $ FIXED rate = 3% to IBM. The initial $$ amount of the swap is $125 million. The initial exchange rate is $1.25 per British Pound. Payment dates are annual, with the first of the 3 pay-dates at the end of the first year. Make up the standard table illustrating what IBM pays and receives, in $$ and in Pounds, at each date (0, 1, 2, 3). Do not forgot the Principal Payments. (Hint note that IBM is paying interest in British Pounds.)
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