Britannia 1,000 pound ia Assurance, Ltd (BA) enters into a 4-year currency swap on a notional principal of BA wants to swap out of pound debt and into dollar debt. BA will receive (interest on) s fat terlng and pay (interest on) US dollars. All interest payments are annual, and the swap curve at. The spot rate at the time of the swap agreement is $1.25 per . The swap dealer quotes the following rates: Swap Rates US dollar 4- year bicd 1.50% 2.20% 4-year ask 1. 55% 2.25% Pounds Sterling a Circle the appropriate Bid and Ask rates in the table above b. Calculate all cash flows paid and received by Britannia Assurance (BA) indicating the currency by completing the following table Place pound sterling cash flows in the pound sterling CFs row and US dollar cash flows in the US dollar CFs row Circle+for cash inflows to BA: circle- for cash outflows from BA NowYear 1 Year 2 Year 3 Year 4 US dollar CFs+ Pound sterling+ CFs c. Why might BA enter into such a currency swap. Circle one of the following BA can borrow more cheaply in the pound sterling but earns US dollar revenues BA can borrow more cheaply in the US dollar but earns pound sterling revenues