Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Posting 3rd time. Will downrate if wrong. A bank enters into a forward purchase TT covering an export bill for Swiss Francs 1,00,000 at *

image text in transcribedPosting 3rd time. Will downrate if wrong.

A bank enters into a forward purchase TT covering an export bill for Swiss Francs 1,00,000 at * 32.4000 due 25th April and covered itself for same delivery in the local inter bank market at 32.4200. However, on 25th March, exporter sought for cancellation of the contract as the tenor of the bill is changed. In Singapore market, Swiss Francs were quoted against dollars as under: Spot USD 1 = Sw. Fcs. 1.5076/1.5120 One month forward 1.5150/ 1.5160 Two months forward 1.5250 / 1.5270 Three months forward 1.5415/ 1.5445 and in the interbank market US dollars were quoted as under: Spot USD 1 = 49.43021.4455 Spot / April 4100/.4200 Spot/May .4300/.4400 Spot/June 4500/.4600 Calculate the cancellation charges, payable by the customer if exchange margin required by the bank is 0.10% on buying and selling

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Numerical Solution Of The American Option Pricing Problem Finite Difference And Transform Approaches

Authors: Carl Chiarella, Boda Kang , Gunter H Meyer

1st Edition

9814452610,9814452637

More Books

Students also viewed these Finance questions

Question

Improve our inventory management?

Answered: 1 week ago