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2) A currency swap has a remaining life of 15 months. It involves exchanging interest at 10% on 20 million for interest at 6% on

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2) A currency swap has a remaining life of 15 months. It involves exchanging interest at 10% on 20 million for interest at 6% on $30 million once a year. The term structure of interest rates in both the United Kingdom and the United States is currently flat, and if the swap were negotiated today the interest rates exchanged would be 4% in dollars and 7% in sterling. All interest rates are quoted with annual compounding. The current exchange rate (dollars per pound sterling) is 1.5500. What is the value of the swap to the party paying sterling

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