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Academic MBA Question:

Question: A dealer has the following position in GBP against INR:

  • Spot – GBP 20 million Long
  • Three months forward – GBP 20 million short
  • The spot was executed at an average rate of 100.50 and the forward rate was 100.75.
  • The dealer now wants to close his position. If the prevailing swap quotes are as follows, what is the profit/loss in squaring off his position?
  • GBP/INR Spot: 100.6510/100.6530
  • 3-month Swap: 9135/9170 (10 Marks)


Academic Assignment Answer:

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