1. Medstat enters into a 3-year pay pounds receive US dollar cross-currency swap. Medstat will pay 1.2% fixed pound interest, and receive 1.4% fixed dollar interest. The principle is $10,000,000 and the current exchange rate is $1.5/.
   1. Calculate the cash inflows and out flows for Medstat for the next three years.
   2. Calculate the gain or loss if Medstat wants to unwind (terminate) the cross-currency swap after two years. Assuming the 1-year pound rate is 1.5% and dollar rate is 1.2%, and the exchange rate is $1.2/ then