Homework Answers
The Interest for the amount lent and borrowed in GBP will be calculated at the GBP interest rate and the for the amount lent and borrowed in EUR will be calculated at the EUR interest rate for the period concerned
GBP interest amount = 67,914,000 * 5.5% * 1/2 (6months = 1/2 year)
= GBP 1,867,635
EUR interest amount = 63,000,000 * 3.75% * 1/2 (6months = 1/2 year)
= EUR 1,181,250
So, these amounts will be exchanged every 6months in the swap
So, correct option is e)
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