Calculation of Swap Points Illustration 2


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Given:

Spot USD CAD 1.1000/1.1100

CAD deposit rate 4.75%

USD deposit rate 4.00%

3 months forward (swap points) 20/30

Calculate arbitrage free lending rates for the two currencies.

(Ans.: Interest Rate in USD 5.09% & CAD 4.02%)

 


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