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Urgent!!! swap points

Final 1142 views 2 replies

 

The market rates for Rs and Dollar are as under :
Spot                                             Rs.48.50/70
Two months                                          25/30 points
Three months                                       40/45 points
 
What are Forward rates?
 
As per my konwlwdge the swap points are to be adjusted to decimals
 
Therefore 
 
2months          Rs.48.75(48.50+0.25)   /  Rs.49.00(48.70+0.30)
3months          Rs.48.90(48.50+0.40)  /   Rs.49.15(48.70+0.45)
 
Am I correct?
 
Whya I asked this questions is In MAY 2012 Q No : 5(a) suggested answer taken rates as follwos
 
2M                  48.25/30
3M                  48.40/45
 
Which is correct?
 
 
Replies (2)

 


Note: In the question it has not been dearly mentioned that whether quotes given for 2 and 3 months (in points terms) are premium points or direct quotes. Although above solution is based on the assumption that these are direct quotes, but students can also consider them as premium points and solve the question accordingly.
 

Friends,

I got the answer,Please refer to the note given below the suggested answer.

Thank you All.

When Swap Point is Low/High Style then it will add in Spot Rate and if it is High/Low Style then Deduct from Spot Rate.

In this Q. it is Low/High style so it will add in Spot Rate. So this Q. solved by you is absolutely correct.


CCI Pro

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