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Dealer lent PKR 15,000,000 at 11.50% for 11 months (335 days) and forward rate (effective rate) for 4*11 (215 days) is 12.35%.


Required:

  1. What is your current borrowing rate for 4 months

  2. How could you hedge your position

  3. If the market is quoting 11.50/75 for 4vs11 at what rate will you deal.

  4. If currently 6 month Kibor is 12% and 7 month Kibor is 12.50%, after 4month 6 Month Kibor is 11.25%, and 7 month Kibor is 10.50%. How much FRA buyer & seller pay/receive.

  5. What would be overall approximate profit & loss position of dealer after 4 Month


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