Please see the question attached and the extract of suggested answer In the above question, why for computation of swap loss, forward rate of March i.e. 73.4275 is considered. Whereas we have to consider ...
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In question 36, while calculating swap loss, when bank should buy forward. why we have used spot/March rate. As transaction occured in April, then why we used spot/March Kindly reply…
Sir, in Q.36 of C.W. of Forex, why has the option contract rate of March (i.e., Spot/March ask = 73.4275) been used to calculate the Swap Loss?
Due date is 4th April. Why Spot(ask) of march (i.e. 73.4275) is used for calculation of swap loss. It should be Option forward of April i.e.73.5675. And therefore swap loss will be [(73.2775-73.5675)*1,00,000] = 29000. Is my answer correct if ...