At time t, company A borrows 2 million pounds at an interest rate of 5% p.a., paid quarterly, for a period of 1 year. It then enters into a 1-year swap at an exchange rate of USD/GBP 1.23. The swap rates are 3-month USD LIBOR, and 5.2% p.a. compounded quarterly in pounds. What are the payments on the loan, on the swap and on the combination of them? Assume that 3-month LIBOR (annualized) evolves as follows: t +3 4.8% t +6 5.0% t +9 5.3% t + 12 5.5% Use the following table to provide your answer (use +/- to indicate the direction of the CF): + t t +3 t +6 t+9 t + 12 Loan Swap Combination