hi john, i just wondering, why calculating the netting is using spot rate (current) not using spot rate in 3 month time ? because the question mention these subsidiary are due to pay in 3 month time.
to calculate the actual pay in 3 month of netting, 3 month of forward will be accurate right ?
but the answer is using spot rate
from question june 2013 question 3
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netting rate
5y ago#1In part (a) the answer does use the forward rate.
For part (b) the question says (in the last line of the first paragraph) to use spot rates.
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