if we assume that upfront fees include in forward rate but total amount of cost will same in both case.?

then we have to calculated cos of fund assuming premia = ( FV ) multiply by (1-rate) , 64*(1-0.02) = 62.72 hence premia = 64-62.72 = 1.28 per USD =1.28*60000= 76800 i.e cost will be here also . means premia = 2% of 64 ( whether included or not) only we will compare spot rate vs 62.72 for total gain /loss cost remain same in both case. [Video Time Stamp: 08:36] Video Details ------------- Advanced Financial Management - AFM Foreign Exchange Exposure and Risk Management #99. Illustration # 54

Vinod Kumawat

CA Final

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14-Apr-26 08:45

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