On 1 October 2015 Mr. X an exporter enters into a forward contract with a BNP Bank to sell US$ 1,00,000 on 31 December 2015 at 65.40/$. However, due to the request of the importer, Mr. X received amount on 28 November 2015. Mr. X requested the bank the take delivery of the remittance on 30 November 2015 i.e. before due date. The inter-banking rates on 28 November 2015 was as follows: Spot One Month Premium 65.22/65.27 10/15 If bank agrees to take early delivery then what will be net inflow to Mr. X assuming that the prevailing prime lending rate is 18%.
On 1 October 2015 Mr. X an exporter enters into a forward contract with a BNP Bank to sell US$ 1,00,000 on 31 December 2015 at 65.40/$. However, due to the request of the importer, Mr. X received amount on 28 November 2015. Mr. X requested the bank the take delivery of the remittance on 30 November 2015 i.e. before due date. The inter-banking rates on 28 November 2015 was as follows: Spot One Month Premium 65.22/65.27 10/15 If bank agrees to take early delivery then what will be net inflow to Mr. X assuming that the prevailing prime lending rate is 18%.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Ab. 155.
Transcribed Image Text:On 1 October 2015 Mr. X an exporter enters into a forward contract with a BNP Bank to sell US$
1,00,000 on 31 December 2015 at 65.40/$. However, due to the request of the importer, Mr. X
received amount on 28 November 2015. Mr. X requested the bank the take delivery of the
remittance on 30 November 2015 i.e. before due date. The inter-banking rates on 28 November
2015 was as follows:
Spot
One Month Premium
*65.22/65.27
10/15
If bank agrees to take early delivery then what will be net inflow to Mr. X assuming that the
prevailing prime lending rate is 18%.
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