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Kaplan Revision Kit 20 CASASOPHIA CO

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  • April 8, 2020 at 3:03 pm
    Kaplan Revision Kit 20 CASASOPHIA CO 2
    confideans
    Participant

    (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.

    April 8, 2020 at 5:05 pm
    Kaplan Revision Kit 20 CASASOPHIA CO 3
    John Moffat
    Keymaster

    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.

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