Question: Q 2 . Current USD Interest rates are 7 % per annum and AUD rates are 9 % per annum, flat for all terms. Current

Q2. Current USD Interest rates are 7% per annum and AUD rates are 9% per annum, flat for all terms.
Current value of AUD is 0.62 USD. Under a FX swap agreement, a financial institution pays 8% per annum
in AUD and receives 4% per annum in USD. Notional principals are 12 Million USD and 20 Million AUD.
Payments are exchanged every year, with one exchange having just taken place. The swap will last 5 more
years. What is the value of the swap to the financial institution? pls showcase the calculations made

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