Question

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.)**

Answer #1

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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 foreign exchange department at Tokyo’s Daiwa Bank quoted the
spot rate on the euro at €0.007185/¥. The 90-day forward rate is
quoted at a premium of 4.20 percent on the euro. What is the 90-day
forward rate? (Round answer to 6 decimal places, e.g. 15.251945.
Use 360 days for calculation.)
Forward rate €________________ /¥

The foreign exchange department at Tokyo’s Daiwa Bank quoted the
spot rate on the euro at €0.007165/¥. The 90-day forward rate is
quoted at a premium of 5.30 percent on the euro. What is the 90-day
forward rate? (Round answer to 6 decimal places, e.g. 15.251945.
Use 360 days for calculation.) Forward rate €___________/¥

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...

The foreign exchange department at Tokyo’s Daiwa Bank quoted the
spot rate on the euro at €0.007130/¥. The 90-day forward rate is
quoted at a premium of 5.80 percent on the euro. What is the 90-day
forward rate? (Round answer to 6 decimal places, e.g.
15.251945. Use 360 days for calculation.)

The foreign exchange department at Tokyo’s Daiwa Bank quoted the
spot rate on the euro at €0.007215/¥. The 90-day forward rate is
quoted at a premium of 4.60 percent on the euro. What is the 90-day
forward rate? (Round answer to 6 decimal places, e.g. 15.251945.
Use 360 days for calculation.)

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?

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?

The following is market information:
Current spot rate of pound
=
$1.45
90-day forward rate of pound
=
$1.46
3-month deposit rate in U.S.
=
1.1%
3-month deposit rate in Great Britain
=
1.3%
If you have $250,000 and use covered interest arbitrage for a
90-day investment, what will be the amount of U.S. dollars you will
have after 90 days?

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.

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