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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Kaplan Revision Kit 20 CASASOPHIA CO
(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.
I 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.