You are a price maker. Your 6-month EUR/USD swap rate is 25/26. At what rate would a corporate customer buy and sell USD spot versus 6 months?
Question
Solution 1
As a price maker, you set the rates at which you buy and sell currencies. The 6-month EUR/USD swap rate you've provided is 25/26. This means you're willing to buy Euros and sell US dollars at a rate of 25, and sell Euros and buy US dollars at a rate of 26.
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