Question: Dealer lent PKR 15,000,000 at 11.50% for 11 months (335 days) and forward rate (effective rate) for 4*11 (215 days) is 12.35% (/10)

Required:

1. What is your current borrowing rate for 4 months

2. How could you hedge your position

3. If the market is quoting 11.50/75 for 4vs11 at what rate will you deal.

4. If currently 6 month Kibor is 12% and 7 month Kibor is 12.50%, after 4month 6 Month Kibor is 11.25%, and7 month Kibor is 10.50%. How much FRA buyer & seller pay/receive.

5. What would be overall approximate profit & loss position of dealer after 4 Month

PKRV Rates

0-7days 6.38

8-15days 6.47

16-30days 6.48

31-60days 6.48

61-90days 6.48

91-120days 6.49

121-180days 6.49

181-270days 6.54

271-365days 6.55