Japanese rate U.S. rate 4.00% c.c. 9.00% c.c. Swap receive Principal 2.9029% yen 1,200,000,000 (Find using the Goal Seek) pay Principal 8.00% USD $10,000,000 Maturity 3 years Exchange rate 110 per 0.009091 per $1 1.0 $ Time Cash Flow on $ Bond ($ mil) PV ($ mil) Cas ITOW on bond ( PV ( mil) 0 1 2 3 Total PV in $ Value of the swap $0 Set = 0 in Goal Seek Using Forward rate Yen rate 2.9029% Time Cash Flow on $ Bond ($ mil) Cash Flow Forward Cash Flow Net Cash on bond exchange rate on bond Flow ( mil) (S for) ($ mil) (S mil) PV ($ mil) 0 1 2 3 3 Total Value of the swap Japanese rate U.S. rate 4.00% c.c. 9.00% c.c. Swap receive Principal 2.9029% yen 1,200,000,000 (Find using the Goal Seek) pay Principal 8.00% USD $10,000,000 Maturity 3 years Exchange rate 110 per 0.009091 per $1 1.0 $ Time Cash Flow on $ Bond ($ mil) PV ($ mil) Cas ITOW on bond ( PV ( mil) 0 1 2 3 Total PV in $ Value of the swap $0 Set = 0 in Goal Seek Using Forward rate Yen rate 2.9029% Time Cash Flow on $ Bond ($ mil) Cash Flow Forward Cash Flow Net Cash on bond exchange rate on bond Flow ( mil) (S for) ($ mil) (S mil) PV ($ mil) 0 1 2 3 3 Total Value of the swap