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( a ) On 1 st Jan 2 0 2 2 , Mr . Ashok, an exporter enters into a forward contract with PNB bank
aOn st Jan Mr Ashok, an exporter enters into a forward contract with PNB bank for USD on st March @
Inter Bank rate on th Feb was as follows:
Spot:
Onemonth premium
Twomonth premium
Inter Bank rate on st March was as follows:
Spot:
Onemonth premium
Additional Information
Interest rate a
The bank charge p on each trade
Call Premium ITM of Strike Price K is Rs and the Put Premium ATM of Strike Price K is Rs Create a Bull spread using such information. Show this bull spread graphically and highlight BEP, PL @ & P L@ at the time of expiration
Are Basis AnD BaSiS RiSk? ShOw AHow A IMpaCt IN BaSis WIlL ImPacT ShOrT HedGeMr. Ashok received information about the cancellation of the original deal from the counterparty on th Feb Therefore, Mr Ashok requested PNB to cancel forward before the due date ieth Feb
Calculate the net cash InflowOutflow of Mr Ashok.
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