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4. Companies BP and the Delta Airways have been offered the following rates p.a. on GBP 10 million and USD 13.5 million 5year loans. The
4. Companies BP and the Delta Airways have been offered the following rates p.a. on GBP 10 million and USD 13.5 million 5year loans. The USD/GBP rate is 1.35. (1.35 USD per unit of GBP) USD GBP BP 4% 2% Delta 5% 4.5% BP needs USD borrowing and Delta Airways needs GBP borrowing. A swap institution arranges a swap agreement and takes 30 bps on the swap transaction and the remaining benefits of swap are shared equally by the parties. Show the swap cashflows
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