 |
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 Illustrative Examples |
| Deposit Currency: |
USD100,000 |
| Linked Currency: |
EUR |
| Tenor: |
One Week |
| Spot Rate: |
1.3360 |
| Option Oneļ¼ |
Initial exchange rate = Spot rate |
| Initial Exchange Rate: |
1.3360 (i.e. EUR1 = USD1.3360) |
Interest Rate of Deposit
(Interest Return): |
0.125% p.a.
(USD2.40) |
Option Premium Rate
(Option Premium Return): |
20.875% p.a.
(USD405.90) |
| Scenario Four: |
EUR weakens significantly against USD |
| FINAL
EXCHANGE RATE: |
1.3160 |
| | |
| Payment Currency: |
EUR |
| Maturity Balance Calculation: |
(Principal + Interest Return + Option Premium Return) / Initial Exchange Rate |
| | |
| Maturity Balance: |
(USD100,000+USD2.40+USD405.90)/1.3360 |
| |
=EUR75,155.91 |
If customer chooses to convert to USD at the prevailing exchange rate of 1.3160, customer will receive USD98,905.18.
|
| Loss: |
USD1,094.82 |
| Annualized Return: |
-56.30% |
| Note: |
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The Spot Rate is the mid-price of buying and selling the currencies. |
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The related tax to be withheld is not shown in the above example. |
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The example shown is for reference only and shall not constitute any representation or warranty by the Bank in respect of any possible gain or loss. |
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