Buryecs Co (march/june 17) — OpenTuition Forums

Sshady7y ago

Hi Moffat b-ii_ 1_i didn’t understand the logic behind year 3 swap not translated and the gain on swap at the end of 39m. 2_my working for options are 7,500/7.75=968m premium 968*1.6%*.1430=2.2 net receipt is 966 and this is first time asked like that , i have good grasp of contacts questions but not sure about this is different then examiner answer , any errors which i can correct.

John MoffatTutor7y ago#1

1. At year 3, the $5,000 will be exchanged at the original spot rate, as per the agreement, and it this that is effectively gaining them the 39m. 2. This was a confusing question, and what you have done would still get the marks :-)

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