Question

Country USD equiv. Currency per USD Tuesday Monday Tuesday Monday U.K. (Pound) 1.7368 1.7424 0.5758 0.5739...

Country USD equiv. Currency per USD
Tuesday Monday Tuesday Monday
U.K. (Pound) 1.7368 1.7424 0.5758 0.5739
1 Month Forward 1.7369 1.7425 0.5757 0.5739
3 Months Forward 1.738 1.7434 0.5754 0.5736
6 Months Forward 1.7409 1.7461 0.5744 0.5727
Canada (Dollar) 0.8667 0.8653 1.1538 1.1557
1 Month Forward 0.8674 0.866 1.1529 1.1547
3 Months Forward 0.8688 0.8674 1.151 1.1529
6 Months Forward 0.8708 0.8693 1.1484 1.1504
Japan (Yen) 0.008518 0.008495 117.3985 117.7163
1 Month Forward 0.008548 0.008525 116.0631 117.3021
3 Months Forward 0.008616 0.008593 116.0631 116.3738
6 Months Forward 0.008724 0.0087 114.6263 114.9425
Switzerland (Franc) 0.7648 0.7652 1.3075 1.3068
1 Month Forward 0.767 0.7674 1.3038 1.3031
3 Months Forward 0.7718 0.7722 1.2957 1.295
6 Months Forward 0.7791 0.7794 1.2835 1.283
Euro 1.2000 1.1906 0.8333 0.8399

Using the table what is the 6-month forward pound–yen cross-exchange rate (pound/yen)? Use Tuesday rates.

Homework Answers

Answer #1

USD equivalent rates means $ is in numerator and another currency in denominator like ; $/pound, $/yen, $/Euro etc.

Currency Per USD rate means $ is in denominator and another currency in numerator like : Pound/$ , Yen/$, Euro/$ etc.

Now,

Pound/$ 6 months forward rates    =   0.5744

$/yen 6 months forward rate = 0.008724

So, Pound/yen 6 month forward rate = 0.5744*0.008724

So, Pound/yen 6 month forward rate = 0.0050110656

So, Pound/yen 6 month forward rate = 0.00501107 (rounded off)

So, 6-month forward pound–yen cross-exchange rate (pound/yen) = 0.0050110656 or 0.00501107.

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