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Dear sir,
I understand full calculation (each and every number) but seriously sir i can’t understand where we use swaps in all of this calculation which we usually used or understand in all other swap questions.
This is a very unusual swap question and is not swapping the usual way.
However, it is really just following the instructions in the last sentence of the question. Instead of getting MShs1.5 billion in each of the next three years (and looking at ways of hedging the risk as in the earlier parts of the question), they will be receiving Euros and the conversion will be at the estimated forward rates. The word ‘swap’ here is being used in its simplest meaning – i.e. exchanging one thing for another.
Ohk ok then thank you sir. I just confused the swap method with the usual word swap ?
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