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swaps are always a year behind so you’re looking at the 6% rate for the floaty guy to pay the US dude. at first i was trying to net that 6% with the 5% the fixed duder pays, but looking at the answers and digging stuff out of my memory banks, the 2 don’t net on currency swaps, do they now. tell me it’s as easy as just 6% of 2 mil = 120k USD says right in the problem US guy gets USD so that knocks 2 out. I like my odds on A.
I got A too.
AAAAAa
Man I’m struggling on these plain vanilla currency swaps! I have been working on this for 15 minutes. Do you always not net currency swaps or just this one? I was trying to net the two and I kept getting 280,000 but I was getting it in $ not FC. Maybe I’m just lost on these
Your answer: A was correct! A plain-vanilla currency swap pays floating on dollars and fixed on foreign. The floating rate cash flows on the settlement date are based on the previous period’s ending floating interest rate .06 x $2,000,000 = $120,000. p.226, CFAI, book 6 … "because the payments are made in different currencies, netting is not practical… "
Thanks barthezz, that was a good one. Got me learning something new 
you’re welcome