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Hi sir,
In the Washi Co qn we calculated the future rate on month 6 using lock in rate.
can we also find the future rate as below:As the current forward rate will be similar to the future spot rate at that date, can’t we take the forward rate of 125.3 as spot rate and then take the difference of this SR and unexpired basis to find future rate.
No. There is no reason why the actual future spot rate will be the same as the current forward rate. Forward rates are determined solely by the current interest rates whereas spot rates are affected by many factors.
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