Question: Consider a currency swap in which the domestic party pays a fixed rate in the foreign currency, the British pound, and the counterparty pays a fixed rate in US dollars .The notional principals are $50 million and £30 million. The fixed rates are 5.6% in dollars and 6.25 % in pounds. Both sets of payments are made on the basis of 30 days per month and 365 days per year and the payments are made semi annually
A- Determine the initial exchange of cash that occurs at the start of the swap
B- Determine the semi annual payments
C- Determine the final exchange of cash that occurs at the end of the swap
D- Give an example of a situation in which this swap might be appropriate