(E) according to the answer,
The swap fixes the future exchange rates, although Casaophia Co will lose out if the inflation rate is lower than 9.7%, since the future spot rate will depreciate by less than what is predicted by the forward rates.
I could not understand this part.
For me, I think if the inflation rate is higher than 9.7%, C co will lose out.
please help me to understand.
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Kaplan Revision Kit 20 CASASOPHIA CO
6y ago#1I am sorry but I do not have the Kaplan Kit (only the BPP Revision Kit).
However I do have the original exam question, but the exam question does not have a part (e) (only (a), (b) and (c)). I can only assume that Kaplan have adapted the question.
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