Urgent -- sfm-forex

As per Inflation rate parity Fwd. Rate = Spot Rate (1+inflation rate of price currency)/(1+inflation rate of base curreny)

So, 43.52 =40.11(1.085)/(1+x)

1+X = 43.52/43.52 

1+x =1

x = 0%

Yes Bank is seeking fixed rate funding.It is able to finance at a cost of six months LIBOR + 0.25% for Rs.2 crores for 5 Years. The bank is able to swap into a fixed rate at 7.5% versus six month LIBOR treating six months as exactly half a year.

(a)  What will be the "all in cost" funds to Yes Bank?

(b) Another possibility being considered is the issue of a hybrid instrument which pays 7.5% for 1st three years and LIBOR-0.25% for remaining 2 years.

Given a 3 year swap rate of 8%, suggest the method by which the bank should achieve fixed rate funding.

Inflation Rate = 0 after calculation....????