Can anyone explain the steps of doing this problem?

For example, how to get those numbers in the answers and the overall process..

Thumbs up for step by step explanation!

Thank you.

1. Swap valuation You are a bond portfolio manager at the London office of a large sovereign wealth fund, and have GBP 10M to invest. Because of the currency composition of your benchmark vou do not want to take on additional non-GBP risk . You are considering purchasing a 5-year GBP bond of Royal Dutch Shell, which carries an annual coupon of 5.075 % in GBP . Royal Dutch Shell has issued bonds in several international markets, includ ing the Eurozone. Five-year 3.375% Euro coupon bonds of Royal Dutch Shel, which is currently trading at 99.00 in the Eurozone . The spot exchange rate is currently 0.77 GBP/EUR In addition the following market information is available to you GBP Bond Euro Bond Swap rates against bid ask GBP libor bid as Price 100 99.00 GBP 3.98 Maturity 5 years Coupon 4.03 vearTs 5.075 3.375 EUR 2.42 2.50 Solution: Value Ye Year 2 Year 3 Year 4 Year 5 Yield GBP denominated bond: 5.075 5.075 5.075 5.075 105.075 5.075% GBP -100 EUR denominated bond: EUR -99 3.375 3.375 3.375 3.375 103.375 3.597% Swap EUR-104.0651-3.375-3.375-3.375-3.375-103.375 2.50% GBP -80.1301 3.189 3.189 3.189 3.189 83.319 3.98% Hedged/swapped bond: GBP-76.23 3.189 3.189 3.189 3.189 83.319 5.11% 1. Swap valuation You are a bond portfolio manager at the London office of a large sovereign wealth fund, and have GBP 10M to invest. Because of the currency composition of your benchmark vou do not want to take on additional non-GBP risk . You are considering purchasing a 5-year GBP bond of Royal Dutch Shell, which carries an annual coupon of 5.075 % in GBP . Royal Dutch Shell has issued bonds in several international markets, includ ing the Eurozone. Five-year 3.375% Euro coupon bonds of Royal Dutch Shel, which is currently trading at 99.00 in the Eurozone . The spot exchange rate is currently 0.77 GBP/EUR In addition the following market information is available to you GBP Bond Euro Bond Swap rates against bid ask GBP libor bid as Price 100 99.00 GBP 3.98 Maturity 5 years Coupon 4.03 vearTs 5.075 3.375 EUR 2.42 2.50 Solution: Value Ye Year 2 Year 3 Year 4 Year 5 Yield GBP denominated bond: 5.075 5.075 5.075 5.075 105.075 5.075% GBP -100 EUR denominated bond: EUR -99 3.375 3.375 3.375 3.375 103.375 3.597% Swap EUR-104.0651-3.375-3.375-3.375-3.375-103.375 2.50% GBP -80.1301 3.189 3.189 3.189 3.189 83.319 3.98% Hedged/swapped bond: GBP-76.23 3.189 3.189 3.189 3.189 83.319 5.11%