You are hired by a financial company in new zealand and you, Ask an Expert

Economics

You are hired by a financial company in New Zealand and you have instant access to markets. You would like to lock in a 3-month borrowing cost in NZ$ for your client. You consider a NZ$ 1x4 FRA. But you find that it is overpriced as the market is thin. So you turn to the Aussie. A$ FRAs are very liquid. It turns out that the A$ and NZ$ forwards are also easily available. Create a 1x4 NZ$ synthetic using a 1x4 A$ and financial elements already discussed in class.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91566118

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