On 1 October 2023 Mr. X an exporter enters into a forward contract with a BNP Bank to sell US$ 1,00,000 on 31 December 2023 at 85.40/$. However, due…
CA Final · Advanced Financial Management · MTP · May 2024
On 1 October 2023 Mr. X an exporter enters into a forward contract with a BNP Bank to sell US$ 1,00,000 on 31 December 2023 at 85.40/$. However, due to the request of the importer, Mr. X received the amount on 28 November 2023. Mr. X requested the bank the take delivery of the remittance on 30 November 2023 i.e., before due date. The inter-banking rates on 28 November 2023 was as follows: Spot - 85.22/85.27 One Month Premium 10/15 Note: (1) Consider 365 days in a year. (2) Prevailing Prime Lending Rate is 12% Based on above case scenario, choose the most appropriate answer of the following:
Suggested Answer and Working Notes:
Correct Answer: Option (D)
Fixed Charges Plus Swap Difference and Interest on Outlay of Fund
Topics: Foreign Exchange Exposure and Risk Management
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