Suppose that the swap that you proposed is now 4 years old (i.e.,there is exactly one year to go on the swap).If the spot exchange rate prevailing in year 4 is $1.8778 = €1 and the 1-year forward exchange rate prevailing in year 4 is $1.95 = €1,what is the value of the swap to the party paying dollars? If the swap were initiated today the correct rates would be as shown.

Question

Quizplus · Accepted Answer

The Answer of Suppose that the swap that you proposed is now 4 years old (i.e.,there is exactly one year to go on the swap).If the spot exchange rate prevailing in year 4 is $1.8778 = €1 and the 1-year forward exchange rate prevailing in year 4 is $1.95 = €1,what is the value of the swap to the party paying dollars? If the swap were initiated today the correct rates would be as shown.

Suppose That the Swap That You Proposed Is Now 4