Question

Assume the spot rate of Switzerland franc is $0.86576 and the 90-day forward rate is $0.8716....

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?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2. The spot rate of Swiss franc is quoted at $1.065. The annualized forward premium on...
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/$....
The spot rate on the London market is £0.5525/$, 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...
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...
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...
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
The spot rate for the Canadian dollar is $0.988 per C$. The 30 day forward rate...
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
Assume spot Swiss franc is $0.7200, the three-month forward rate is $0.7400, the annualized three-month Eurodollar...
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.
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)...
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:...
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...
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
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT