Dealer lent PKR 15,000,000 at 11.50% for 11 months (335 days) and forward forward rate for...

 

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Dealer lent PKR 15,000,000 at 11.50% for 11 months (335 days) and forward forward rate for 4*11 (215 days) is 12.35%. 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. If currently 6 month Kibor is 12% and 7 month Kibor is 12.50%, after 4month 6 Month Kibor is 11.25%, and 7 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 Dealer lent PKR 15,000,000 at 11.50% for 11 months (335 days) and forward forward rate for 4*11 (215 days) is 12.35%. 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. If currently 6 month Kibor is 12% and 7 month Kibor is 12.50%, after 4month 6 Month Kibor is 11.25%, and 7 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

Answer rating: 100% (QA)

1 Current borrowing rate for 4 months 15000000 115 412 PKR 575000 2 ... View the full answer