You want to synthetically create a one-year 100,000 tenge loan for yourself two years from now....
You want to synthetically create a one-year 100,000
tenge loan for yourself two years from now. You note that banks
will lend today at the rate of 14% for two years and 12% for three
years. Banks also will take time-deposits at 9% for two years and
10% for three years.
Homework Answers
Inflow 2 years from now 100000
Outflow 3 years from now
Deposit now for 2 years at 9% 100000/1.09^2=84167.999327
Borrow now 84167.999327 for 3 years at 12%
Amount to be returned 3 years
later=84167.999327*1.12^3=118249.978958
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You want to synthetically create a one-year 100,000
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