$($a$)$On $1$st Jan $2022,$ Mr$.$ Ashok, an exporter enters into a forward contract with PNB bank for $500,000$ USD on $31$st March $2022$ @ $85\mathrm{.}40.$

Inter Bank rate on $26$th Feb $2022$ was as follows:

Spot:

$85\mathrm{.}22-85\mathrm{.}27$

One$-$month premium

$15/20$

Two$-$month premium

$35/40$

Inter Bank rate on $31$st March $2022$ was as follows:

Spot:

$85\mathrm{.}50-85\mathrm{.}55$

One$-$month premium

$15/20$

Additional Information

Interest rate a $10\%.$

The bank charge $5$p on each trade

Call Premium $($ITM$)$ of Strike Price $($K$)6500$ is Rs $525,$ and the Put Premium $($ATM$)$ of Strike Price $($K$)7000$ is Rs$.325.$ Create a Bull spread using such information. Show this bull spread graphically and highlight BEP, P$/$L @$6500$ & P$/$ L@$7000$ 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 $26$th Feb $2022.$ Therefore, Mr$.$ Ashok requested PNB to cancel forward before the due date i$.$e$.,28$th Feb $2022.$

Calculate the net cash Inflow$/$Outflow of Mr$.$ Ashok.