Hi Using the table given pls answer question 3 part a and b

Question 3: (16 marks) a. The profit generated by the subsidiary in the U.K. is considered as a good source of money to be used to pay for the import of manufacturing equipment from Japan for the electronic component plant in the U.S.A. The CEO has already entered into negotiations with the Japan supplier of the equipment. The supplier is willing to provide HighTech 3 years to pay for the equipment that will be shipped to HighTech, but the payments must be conducted with quarterly instalments of 5,250,000 Yen by the U.K. subsidiary. This is why the CEO wants you to construct a currency swap arrangement where the profits of the U.K. subsidiary can be used to pay for the equipment. You have to apply the swap bank quotes to conduct this three year swap and also depict the swap graphically for the CEO to see how the swap will work Exchange rates: Spot Bid Ask $/JPY 0.0094 0.0095 $/Won 0.0006 0.0008 $/CAD 0.7614 0.7616 $/GPD 1.3034 1.3038 $/AUS 0.7225 0.7226 $/ZAR 0.0606 0.0607 Current borrowing interest rates on loans: Fixed Libor USA 0.640% 0.130% Japan 0.525% 0.015% South Korea 1.164% 0.654% Canada 0.666% .156% UK 0.577% 0.067% Australia 0.612% 0.102% South Africa 5.045% 4.535% Workings: Calculation of the notional principal of the hedge in Japanese yen: Provide your answers in the Marks cells below Payments to be conducted by HighTech subsidiary in the 0.5 mark U.K. How often? Monthly = 12/ Quarterly = 4/Semi-annual = 2 0.5 mark Swap bank Yen bid rate 0.5 mark Therefore, notional Yen principal calculated with 0.5 mark information above Calculation of the notional principal of the hedge in British pounds: Page 4 of 8 Provide your answers in the Marks cells below Spot exchange rate $/Yen ask rate 0.5 mark Spot exchange rate $/GBP bid rate 0.5 mark Therefore, British pound notional principal calculated 0.5 mark with information above. Swap bank 3 year GBP ask rate 0.5 mark U.K. subsidiary pays quarterly: 0.5 mark GBP/Yen Exchange rate locked in for three years: 0.5 mark Question 3 continued: Complete the diagram below to show the swap transaction graphically by inserting the correct interest rate or currency values below: (6 marks) Japanese Swap bank exporter Nap UK subsidiary Notional Yen sw principal Notional GBP swap principal Yen notional principal = GBP notional principal = b. Explain to the CEO what forfaiting is, why it is possible that forfaiting of the transaction can occur and the implication that it will have on the swap transaction. (4 marks) Provide your answers in space provided below: Question Your answer What is forfaiting? (Give an explanation). (3 marks) Why can forfaiting occur? (1 mark Implication on the swap transaction (State whether it impacts the swap or not and the reason for it). (1 mark)