Consider a currency swap with 3 years remaining. A financial institution receives

3.0% per annum in sterling (GBP) and pays 1.5% per annum in dollars once a year.

The LIBOR/swap interest rate with continuous compounding is flat in both countries.

The British rate is 2.5% per annum and the US rate is 2.0% per annum. The principal

amounts are 10 million pounds and $15 million dollars, and the current exchange

rate is $1.5 = 1. By valuing the currency swap as fixed-rate bonds, what is:

a. The value of the dollar bond in $?

b. The value of the sterling bond in ?

c. The value of the currency swap in $?