Question

Assume the spot rate of Switzerland franc is $0.86576 and the 90-day forward rate is $0.8716. What is the forward premium or discount of Switzerland franc on an annualized basis? Does the market expect Switzerland franc to appreciate or depreciate?

Answer #1

2. The spot rate of Swiss franc is quoted at $1.065. The
annualized forward premium on the franc is 8%. What is the 30-day
forward rate of the franc? how to get $1.0721/franc

The spot rate on the London market is £0.5525/$, while the
90-day forward rate is £0.5587/$. What is the annualized forward
premium or discount on the British pound? (Round answer
to 2 decimal places, e.g. 17.54%. Use 360 days for
calculation.)

Assume a speculator anticipates that the spot rate of franc in
90-days will be lower than today’s 90-days forward arte of the
franc, $0.5 = 1 franc.
How can this speculator use $1 million to speculate in the
forward market?
What occurs if the franc’s spot rate in 90-days is $0.40?
$0.60? $0.50?

The forward rate of the Swiss franc (SF) is $0.50. The spot rate
of the Swiss franc is $0.48. The following interest rates
exist:
U.S.
Switzerland
360-day borrowing rate
7%
5%
360-day deposit rate
6%
4%
Kriner Inc. needs to purchase SF200,000 in 360 days.
Determine the amount of U.S. dollars needed in 360 days if
Kriner Inc. uses a money market hedge.
Group of answer choices
$96,914
$101,904
$101,923
$92,307
$98,770

The spot rate for the Singapore dollar is $.588. The 30-day
forward rate is $.590. The forward rate contains an annualized ____
of ____ percent. a. discount; -4.07 b. premium; 4.07 c.
discount; -4.08 d. premium; 4.08 e. premium; 3.40

Assume spot Swiss franc is $0.7200, the three-month forward rate
is $0.7400, the annualized three-month Eurodollar rate is 5.0
percent, and the annualized volatility of the Swiss franc is 14.0
percent. Use the European option-pricing model to value a
three-month European call option with a striking price of
$0.7320.

The spot rate for the Canadian dollar is $0.988 per C$. The 30
day forward rate is $0.990 per C$. The forward rate for Canadian
dollar contains an annualized ________________ of ________%.
a. discount; 2.42
b. premium; 2.42
c. discount; 4.12
d. premium; 4.12

Consider the following exchange rate quotations:
Britain (Pound) $1.5501/pound £0.6451/dollar 6-month forward
$1.5339/pound £0.6519/dollar
Switzerland (Franc) $0.6683/franc SF1.4963/dollar 6-month forward
$0.6717/franc SF1.4888/dollar
Source: Wall Street Journal.
(1) Compute the percentage forward premium or discount per annum of
the Swiss franc against the U.S. dollar, in American terms. What is
your interpretation of the resulting premium or discount? (2)
Compute the percentage forward premium or discount per annum of the
British pound against the Swiss franc, in British terms.

The following rates exist:
Current spot exchange rate: $1.80/£
Annualized interest rate on 90-day dollar-denominated bonds: 8%
(2% for 90 days)
Annualized interest rate on 90-day pound-denominated bonds: 12%
(3% for 90 days)
Financial investors expect the spot exchange rate to be $1.77/£
in 90 days.
Calculate the expected premium or discount on the
pound
What would you expect the 90-day expected spot exchange
rate to be under uncovered interest rate parity conditions using
the approximate UIRP (i.e., the investor...

Assume that interest rate parity holds and that 90-day
risk-free securities yield 6% in the United States and 6.2% in
Germany. In the spot market, 1 euro equals $1.36.
What is the 90-day forward rate? Do not round intermediate
calculations. Round your answer to four decimal places.
$
Is the 90-day forward rate trading at a premium or discount
relative to the spot rate?
The 90-day forward rate is trading at a relative to the spot
rate.

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 19 minutes ago

asked 22 minutes ago

asked 29 minutes ago

asked 35 minutes ago

asked 37 minutes ago

asked 57 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago