How much us$ does oregon need to pay

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Oregon Inc. just entered into a three-year pay British Pound (£) and receive US dollar currency swap. The three-year British Pound bid rate is 3% and ask rate is 3.2%. The three-year US dollar bid rate is 2% and ask rate is 2.2%. The notional principal is $1,000,000. The spot rate on the date of the agreement was £0.7200/$. At the end of the first year, Oregon decides to unwind the currency swap. Assume the spot rate at that time is £0.6900/$. The two-year British Pound interest rate is 3.5% and the two-year US$ interest rate is 2.5%. How much US$ does Oregon need to pay or receive to unwind the currency swap?

Reference no: EM133412373

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