XCO entered a cross currency swap four years ago and the swap has exactly one year to run. Under the swap XCO pays a bank 6% p.a. fixed on USD 7 million and receives 8% p.a. fixed on NZD 10 million. The next swap payment is due in one years time. One-year zero coupon yields are 5% in the US and 9% in New Zealand and the spot rate of the New Zealand dollar is NZD1 = USD0.6500.

a. What is the value of the US dollar bond?

b. What is the value of the New Zealand dollar bond?

c. What is the value of the swap to XCO?