Washi Co

The answer has used 1.5%. The revenues only inflate in years 2 to 4, so in year 1 there is no inflation and it is 1,200. In year 2 there is 1 years inflation, and so the revenue is 2,400 x 1.015 = 2,436 In year 3 there is 2 years inflation, and so the revenue is 2,500 x (1.015^2) = 2,576 Etc. :-)

Sir, Why the unexpired basis is added instead of deducting it in Washi Co's futures calculation, as the contract is for six month not seven month

The answer must be between the 4 month futures price and the 7 month futures price, and here the 7 month price is lower than the 4 month price.

Sir, Please explain me the theory behind the cross rate calculation for ARD & JPY. Thank you

See my answer here: https://opentuition.com/topic/sep-2018-2/