Red Balloons Ltd, a Canadian supplier of military radar equipment, has just won a bid to lease the Spanish Air Force some high-end sensors for the next ten years. The first of 20 semi-annual payments of 5.3 million will be made on January 1, 2013.

a) In the case of cross-currency swaps like this, the entire amounts are exchanged each time, not simply a net payment. Explain why this is