I need some help understanding Hedge #2 example on CFAI V3 p. 423 “Executing a Hedge”
Why is the bid price used for the spot leg swap EUR purchase when “the all-in forward rate of the swap is already using the bid side of the market”? I understand the same is stated in section 2.3 on p. 391. Would that mean the dealer is taking less on the mismatch amount? I would not think the dealer would and unable to reconcile these differences…
I also reviewed these 2 threads, but not quite fully understand them…
https://www.analystforum.com/forums/cfa-forums/cfa-level-iii-forum/91340282
https://www.analystforum.com/forums/cfa-forums/cfa-level-iii-forum/91331289
Any help is appreciated in advance.