I need a solution for the first part of this question which can be understood. I can not understand ICAI’s solution given in March 21 mock paper
Thanks a lot!!
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The Question itself is incorrect. The line mentioned below the box is incorrect. This same wrong q came in exam in May 19 or 18 also. But the Answer is correct. The Q should be like this that IM wishes to borrow JPY fixed rate and JI at USD floating rate. Please refer to the audio attached.
The sum is a typical sum of two party swap with a mistake by icai…
They have said that IM wants to borrow USD floating…thats wrong…bcoz IM has a comparative advantage in USD floating…so it cannot be that it wants to borrow USD Floating….
Rest is fine
The way we used to do in class
Answer is solved by doing swap but in question swap is not possible. But marks will be given by examiner when you solve by swap I admit que is wrong but we have solve it. May 19 old question