The 90-day forward rate for the euro is $1.07, while the current spot rate of the euro is $1.05. The annualized forward premium or discount of the euro suppose to be _______. A. 1.9 percent discount B. 1.9 percent premium C. 7.6 percent premium D. 7.6 percent discount
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1.9 percent discount
1.9 percent premium
7.6 percent premium
7.6 percent discount
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- Suppose that the spot rate for the euro is $1.5400 and with a forward premium of 2.00%. Which of the following most closely approximates the implied forward rate of the euro in this situation? O-$0.0016 O-$0.0031 O-$0.0047 O $1.5708Suppose the spot price of a euro in dollars is $0.932. The U.S. interest rate for 90 days is 6.875% and the euro rate for 90 days is 4.450%. All interest calculations are done as rate times (#days/360). a. What is the rate for a 90-day forward contract on the euro? b. Suppose the euro forward contract is currently quoted at $0.95. What type of transaction(s) should an arbitrageur conduct to take advantage of the apparent mispricing Only typed answerIf interest rates in the U.S. andeuro are 4% and 6% respectively and the spot rate for Euro ($/€) is $1.1550, what is the 90-day equilibrium forward rate for €?Calculate the percentage forward premium/discount.
- Using Exhibit 5.7, calculate the six-month forward premium or discount for the Euro versus the U.S. dollar. For simplicity, assume each month has 30 days. (X.XX%) or (-X.XX%)How is the cost of hedging payable will be if a 90-day forward rate of the euro completely estimate the spot rate in 90 days from now? A. Zero B. Lower C. Undetermined D. Higher) In another case are these quotes: Spot rate €1.2562/£; 1 month forward €1.2662/£. Which of the two currencies is trading at forward premium?
- ) In another case are these quotes: Spot rate €1.2562/£; 1 month forward €1.2662/£ Which of the two currencies is trading at forward discount? And why€ spot rate = 6-month forward rate = €1.20/£ Euro-zone interest rate = 3% p.a. U.K. interest rate = 2% p.a. What should the 6-month forward rate be if interest rate parity holds?The current five‑year Euro yen and Eurodollar rates are 8% and 12.5% per year, respectively. What is the implied forward premium or discount of the yen (over the current spot rate for a five‑year forward contract) 17% premium 46% discount 74% discount 64% premium
- The spot rate is EURO1.9719/OMR. It is expected that EURO may appreciate by 1% after one month. What will be new exchange rate after appreciation? OMR= 1.7740 EUR EUR/OMR= 1.7740 EUR 1.775/OMR OMR 1.775/EURPlease use the data below, to answer the following question. Interest rate in US (Rh): Interest rate in Euro Zone (Rh): The current spot rate for EUR (SO): The expected spot rate for EUR 1 year later (S1): What is the uncovered rate of return from the Euro Zone point of view (Ruf)? 4.00% 3.20% 7.81% 3.5% 7.5% $1.25 $1.20 O 11.79 %.The $/£ spot rate is $1.60/£1. The UK interest rate is 4% and the US interest rate is 9%. Calculate the one year forward rate using the covered interest parity formula. State if the pound is at a forward discount or at a forward premium, and why.