Determine the notional (UK pound) principal amount and the quarterly cash flows on a: - Pay $ fixed, receive (UK pound) float currency swap. Here is the given information: EXCHANGE RATE: $1.00 = UK 0.50 Fixed Rate LIBOR on 1 year-quarterly 5,000,000 interest rate swap, given spot LIBOR was 1.1% quarterly (4.4% annual basis) R() 90 Days = 0.030 R() 180 Days = 0.035 R() 270 Days = 0.040 R() 360 Days = 0.045 The comparable (UK pound) rates are: R(UK) 90 Days = 0.04 R(UK) 180 Days = 0.05 R(UK) 270 Days = 0.06 R(UK) 360 Days = 0.07 The effective coupon calculates out to be 1.7% quarterly and 6.8% annually. Given this information, can you determine the cash flows and for pay () fixed and receive (UK) float? The answer in the Schweser 08 book (Page 288 Book 5) is simply - pay 1.1% quarterly on the $5,000,000 notional principal - receive the floating rate of the UK pound amount of (UK) 2,500,000 principal The answer was a no-duh moment when I read it. I was wondering if the book skimped out on the calculations or is that as far as you can get with the given information?