Question

**A) If the British Pound (GBP)
is selling today for $1.272/1GBP (spot rate today) and the 180 day
forward rate on the British Pound is $1.251, what is the annualized
forward premium?**

**B) If the Euro
(EUR) is selling today for $1.126/1 euro (spot rate today) and the
90 day forward rate on the Euro is $1.131/1 euro, what is the
annualized forward premium or discount on the Euro?**

Answer #1

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.)

Your answer is incorrect. Try again.
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.)
Forward premium or (discount)
%

The U.S. dollar per British pound spot rate changes from
S0(USD/GBP) = USD 1.3786/GBP to S1(USD/GBP) = USD 1.4890/GBP. What
is the approximate percentage change in the value of the U.S.
dollar?

Currency
Spot quote
Euro (EUR/USD)
1.1278 - 1.1281
British pound (GBP/USD)
1.2845 - 1.2848
Swiss franc (USD/CHF)
1.0020 – 1.0022
Japanese yen (USD/JPY)
110.41 – 110.44
Dominican peso (USD/DOP)
50.540 – 50.600
Part 2. Forward exchange rates
1. If the 3-month forward bid and ask quotes for the British
pound are 15 21, what are the 3-month forward bid and ask exchange
rates?
2. How many US dollars will a customer that enters a 3-month
forward contract to buy £1...

The Current spot quote for CS is $0.9850-60. If you buy $10,000
at the current rate, it will cost you C$10, 152.28. True or
False
The spot rate on the British pound is 1.2450. If the current
interest rate on the British pound is 3% on the US$ is 2%, the
six-month equilibrium forward on British pound is?
The spot and 180-day forward rates for the SFr are $0.7350 and
$0.7406, respectively. The SFr is said to be selling at...

The current USD/JPY spot exchange rate is 110 (USD is base
currency). Assume that your bank quotes you a 180-day forward rate
of 108. Which of the following statements is correct about the
JPY.
Select one:
A. The JPY is selling at an annualized forward discount of
3.64%.
B. The JPY is selling at an annualized forward premium of
1.85%.
C. The JPY is selling at an annualized forward premium of
3.70%.
D. The JPY is selling at an annualized...

Using the following data, answer the following questions:
Spot:
£1 = $1.4487
30‑day
forward:
£1 = $1.4498
90‑day
forward:
£1 = $1.4511
180‑day
forward:
£1 = $1.4529
How much would £1,500,000 cost in dollars?
Is the British pound expected to appreciate or depreciate over
the next 6 months?
What is the 90-day forward premium or discount for the British
pound?
ALL IS ONE PROBLEM

Consider the following information available in the
Diamond Bank:
Spot Rate for the
British Pound Sterling
$1.60
90 – day forward
rate of the pound
$1.59
90 – day UK
interest rate
4%
90 – day U.S.
interest rate
3%
(a)Given this information, would it be a prudent strategy to engage
in covered interest arbitrage? Explain
(b)If covered interest arbitrage is profitable how much profit
would an investor earn if he/she uses $1,000,000?
(c)Briefly discuss the realignment process that will...

Assume that the spot rate for May 10, 2018 (“today”) is $/€ =
1.1215,
Calculate the 30day, 90day, 180day (assume a 360day year) and for
the dates shown below
the actual and annualized forward premium or discount (“f”in %)
for the U.S. dollar compared to the euro
30day $/€ forward rate = 1.1944
90day $/€ forward rate = 1.198218
180day $/€ forward rate = 1.2048
$/€ forward rate on December 17, 2019 = 1.2054

Find the most recent spot rates and forward rates of British
pound, euro, and Yen. What each rate present? Why there are only a
few currencies with available forward rates?

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