Solution-Determine the extension charges payable by the

Determine the extension charges payable by the customer

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Reference no: EM132776290

Suppose you as a banker entered into a forward purchase contract for US$ 50,000 on 5th March with an export customer for 3 months at the rate of ` 59.6000. On the same day you also covered yourself in the market at `60.6025. However on 5th May your customer comes to you and requests extension of the contract to 5thJuly.

On this date (5th May) quotation for US$ in the market is as follows:

Spot/ 5th June 59.2300/2425

Spot/ 5thJuly 59.6300/6425

Problem 1: Assuming a margin on buying and selling, determine the extension charges payable by the customer and the new rate quoted to the customer

Reference no: EM132776290

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Determine the extension charges payable by the customer

Reference no: EM132776290

Reference no: EM132776290

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