The U.K. manager of an international bond portfolio would like to synthetically sell a large position in

Question:

The U.K. manager of an international bond would like to synthetically sell a large position in a French government bond, denominated in Euros. The bond is selling at its of €46.15 million, which is equivalent to £30 million at the current of £0.65. The bond pays interest at a fixed rate of 5.2 percent annually for 10 years. The manager would like to sell the bond and invest the proceeds in a pound-denominated floating-rate bond. Design a currency swap strategy that would achieve the desired objective and identify the payments that would occur on the overall position, which includes both the French bond and the swap. The fixed rates on the currency swap are 4.9 percent in pounds and 5.7 percent in Euros?
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...