Question

If the spot exchange rate is 0.62 euro per Canadian dollar and
the **three-month forward rate** is 0.60 euro per
Canadian dollar, then the ________ on the Canadian dollar in
percentage (**at an annual rate**) is roughly
________.

Select one:

a. forward premium, 3.226%

b. forward premium, 12.90%

c. forward discount, 12.90%

d. forward discount, 3.226%

The 1-year interest rates on Canadian dollar and U.K. pound are
2 % and 5 % respectively. If the current spot rate is 2 Canadian
dollar per pound, then the 1-year forward rate (F _{Canadian
$/£} ) implied by the covered interest rate parity
approximation would be______.

Select one:

a. 1.94

b. 2.15

c. 2.06

d. 0.97

If two countries had the same term structures of interest rates, then the forward premium or discount would be_________.

Select one:

a. decreasing

b. increasing

c. one

d. zero

Suppose that the U.S. inflation rate is 4 percent and the U.K. inflation rate is 1.5 percent. The current spot rate is 1.2 $/£ today. The PPP exchange rate in the long run should be______; and the U.K. pound today is said to be________.

Select one:

a. 1.17 $/£; undervalued

b. 1.23 $/£; undervalued

c. 1.23 $/£; overvalued

d. 1.17 $/£; overvalued

Answer #1

If you are satisfied with a answer plz upvote thank you

1. 27
The 1-year interest rates on Canadian dollar and U.K. pound are
2 % and 5 % respectively. If the current spot rate is 2 Canadian
dollar per pound, then the 1-year forward rate (F Canadian
$/£ ) implied by the covered interest rate parity
approximation would be______.
Select one:
a. 2.15
b. 2.06
c. 1.94
d. 0.97
1.29
If the spot exchange rate between dollars and pounds is equal to
1.8 dollars for one U.K. pound and the...

The spot rate of exchange between the U.S. dollar and the euro
is 1.35 (dollar/euro) and the three-month forward rate of exchange
is 1.29.
Select one:
a. The euro is selling at a discount and the standard forward
discount is 17.78 percent.
b. The euro is selling at a premium and the standard forward
premium is 18.60 percent.
c. The euro is selling at a premium and the standard forward
premium is 15.78 percent.
d. The euro is selling at...

Suppose the spot exchange rate for the Canadian dollar is
Can$1.15 and the six-month forward rate is Can$1.17.
a.
Which is worth more, a U.S. dollar or a Canadian dollar?
b.
Assuming absolute PPP holds, what is the cost in the United
States of an Elkhead beer if the price in Canada is Can$3.00?
(Round your answer to 3 decimal places, e.g.,
32.161.)
c.
Is the U.S. dollar selling at a premium or a discount relative
to the Canadian dollar?...

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

Suppose the spot
exchange rate for the Canadian dollar is Can$1.04 and the six-month
forward rate is Can$1.06.
a.
Which is worth more, a U.S. dollar or a Canadian dollar?
Canadian dollar
U.S. dollar
b.
Assuming absolute PPP holds, what is the cost in the United States
of an Elkhead beer if the price in Canada is Can$2.69?
(Enter your answer as directed, but do not round
intermediate calculations. Round your answer to 2 decimal places,
e.g.,...

Suppose the spot exchange rate for the Canadian
dollar is Can$1.06 and the six-month forward rate is Can$1.08.
a.
Which is worth more, a U.S. dollar or a Canadian dollar?
b.
Assuming absolute PPP holds, what is the cost in the United
States of an Elkhead beer if the price in Canada is Can$2.89?
(Do not round intermediate calculations and round your
answer to 2 decimal places, e.g., 32.16.)
c.
Is the U.S. dollar selling at a premium or a...

The spot exchange rate for Canadian dollars is $C1.33/$US.Dollars
six-month interest rate
one-year interest rateCanada
2%
2.5%U.S.
2.5%
2.75%a. What is the six-month fair forward
exchange rate?b. Is the Canadian dollar a discount
or premium currency vs. the United States dollar?c. What does it cost in U.S. dollars
to purchase $C1,000 now?d. How many Canadian dollars will you
receive by entering a six-month forward contract to sell
$1,000?e. What will it cost in Canadian
dollars to purchase...

The current spot exchange rate is $1.15 /Euro and the
three-month forward rate is $1.30/Euro. Consider a three-month
American call option on €62,500 with a premium of $0.25 per
Euro.
For this option to be considered out- of-money, the strike price
can be_____________.
$1.25
$1.50
$1.00
$1.15

Suppose the spot exchange rate for the Canadian dollar is
Can$1.10 and the six-month forward rate is Can$1.07.
Assuming absolute PPP holds, what is the cost in the United
States of an Elkhead beer if the price in Canada is Can$3.14?

On June 1, 2020, the Euro had a spot rate of .9098 per USD. The
3-month forward rate of the Euro was .9123 on that date. What is
the Euro's forward premium or discount?
A.
1.52% forward discount
B.
1.52% forward premium
C.
1.1% forward discount
D.
1.1% forward premium

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 49 seconds ago

asked 1 minute ago

asked 5 minutes ago

asked 7 minutes ago

asked 7 minutes ago

asked 7 minutes ago

asked 8 minutes ago

asked 13 minutes ago

asked 13 minutes ago

asked 18 minutes ago

asked 19 minutes ago

asked 19 minutes ago