AnalystAlan

Now I have one more question: At the end of Year 2: Interest rates for FC would be applied to the 1Mill $, Why can’t we use interest rates for USF, since having 1 Mill $?
Because atP229 example fixedfor fixed currency swap
AA amd BB swap currencies
AA get USD1.0 million, agreeing to pay BB 10% interest in USD annually.( it pay BB in USD interest rate, not AUD interest rate. it is different from what you said)
BB get AUD 2.0 million, agreeing to pay AA 8% interest in USD annually.
thanks.