FOREIGN-CURRENCY-BREAK-FORWARD ZERO-COST FORWARD EXCHANGE RATE ITERATION PROCEDURE




Financial solutions home page

  1. Log into your account or if you are a new user, register your account and enable two factor authentication.
  2. Click on the [Currency break-forward] button, this will take you to the Currency break-forward parameters page.

Currency break-forward parameters page

  1. Select the name of domestic currency denomination from the drop-down list.
  2. Select the name of foreign currency denomination from the drop-down list.
  3. Enter the spot exchange rate(domestic currency units per unit of foreign currency).
  4. Enter the break forward option contract expiry period in years.
  5. Enter the forward contract expiry period under no-breaking assumption in years.
  6. Enter the exchange rate volatility.
  7. Enter the domestic zero rate for breaking put option expiry period.
  8. Enter the foreign zero rate for breaking put option expiry period.
  9. Enter the domestic zero rate for forward contract expiry period under no-breaking assumption.
  10. Enter the foreign zero rate for forward contract expiry period under no-breaking assumption.
  11. Enter the allocated expenses and tax.
  12. Enter the profit loading. If the value of the zero-cost forward-exchange-rate for the break-forward contract plus dealing expenses and tax is P, and the profit loading is x, the final value of the forward exchange rate is (1.0 + x)*P.
  13. Click the submit button and this will take you to the output display page.

Output display page

  1. You can view pricing model output together with input parameters you entered.
  2. At the bottom of the page you can click on the button to create database record for the current model output. This will take you to the create database record page where you should click on the create button to create the database record.
  3. After clicking on the create button to create the database record, you will be taken to the database records view page, where you can scroll vertically or horizontally to view database records including the one you just created.
  4. You can filter database records according to the currency of valuation using the filter box. You can click on the details link on the extreme right of a particular database record, this will take you to the particular database record details page.