[Tan]

So forgetting about the borrower or lender, since the interest rate is decreased the future price is not increased?
(When LIBOR decreased by 0.5%)

Thanks for the previous reply.

[Tan]

Hi Sir. Thanks for the reply.

For this question, the premium is converted the spot rate of $1.1618 instead of $1.1585. For my understanding, I applied the bank always wins rule.

However, I found the similar question in June 2011 Q2 Casasophia. The premium is converted by $1.3585 instead of $1.3618.

These two scenarios are considered the same situation? Or is my misunderstanding? It made me confused.

Thanks.

[Author]

Posts