Assume that 1 year has passed since you entered into the transaction described in problem 4. Assume that the new spot exchange rate is CHF1.45/$ and that UBS is now quoting the following interest...

Assume that 1 year has passed since you entered into the transaction described in problem 4. Assume that the new spot exchange rate is CHF1.45/$ and that UBS is now quoting the following interest rates on 4-year swaps:

U.S. Dollars: 7.50% bid and 7.60% offered against the 6-month dollar LIBOR

Swiss Francs: 6.75% bid and 6.85% offered against the 6-month dollar LIBOR

If you close out the swap in problem 4, what net dollar cash flow will you experience? Explain why this is the correct amount. You can assume that the term structures of interest rates in both currencies are flat.