Question 2The following wholesale exchange rates are taken from Oanda.com on September 21, 2020.Currency PairAUD/USDBidAsk0.73060.7307AUD/JPYAUD/CADAUD/NZD76.2576.320.96260.96341.07811.0795AUD/CHF0.66480.6653The forward quotes in point form are as follows for the currency pairs AUD/USD andAUD/CHF as of September 21, 2020.Currency1-month forward3-month forward1-year forwardPairpointspointspointsBidBidAskBidAskAskAUD/USDAUD/CHF0.60000.70002.0002.30004.0005.5000-6.4000-6.2400-16.9000-16.5200-70.5000-68.5000d) Calculate the outright forward rates for the currency pair AUD/CHF.e) Calculate the outright forward rates for the currency pair AUD/USD.f) Calculate the forward premium (discount) based on the rates calculated in e) above.g) Do the forward rates imply a strengthening or weakening of the USD with respect to theAustralian dollar? Explain your logic.

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Question 2 The following wholesale exchange rates are taken from Oanda.com on September 21, 2020. Currency Pair AUD/USD Bid Ask 0.7306 0.7307 AUD/JPY AUD/CAD AUD/NZD AUD/CHF 76.25 76.32 0.9626 0.9634 1.0781 1.0795 0.6648 0.6653 The forward quotes in point form are as follows for the currency pairs AUD/USD and AUD/CHF as of September 21, 2020. 1-year forward points Currency 1-month forward 3-month forward points Bid points Bid Pair Ask Ask Bid Ask AUD/USD AUD/CHF 0.6000 0.7000 2.000 2.3000 4.000 5.5000 -6.4000 -6.2400 -16.9000 -16.5200 -70.5000 -68.5000 d) Calculate the outright forward rates for the currency pair AUD/CHF. e) Calculate the outright forward rates for the currency pair AUD/USD. f) Calculate the forward premium (discount) based on the rates calculated in e) above. g) Do the forward rates imply a strengthening or weakening of the USD with respect to the Australian dollar? Explain your logic.

Question 2 The following wholesale exchange rates are taken from Oanda.com on September 21, 2020. Currency Pair AUD/USD Bid Ask 0.7306 0.7307 AUD/JPY AUD/CAD AUD/NZD AUD/CHF 76.25 76.32 0.9626 0.9634 1.0781 1.0795 0.6648 0.6653 The forward quotes in point form are as follows for the currency pairs AUD/USD and AUD/CHF as of September 21, 2020. 1-year forward points Currency 1-month forward 3-month forward points Bid points Bid Pair Ask Ask Bid Ask AUD/USD AUD/CHF 0.6000 0.7000 2.000 2.3000 4.000 5.5000 -6.4000 -6.2400 -16.9000 -16.5200 -70.5000 -68.5000 d) Calculate the outright forward rates for the currency pair AUD/CHF. e) Calculate the outright forward rates for the currency pair AUD/USD. f) Calculate the forward premium (discount) based on the rates calculated in e) above. g) Do the forward rates imply a strengthening or weakening of the USD with respect to the Australian dollar? Explain your logic.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter4: Exchange Rate Determination

Section: Chapter Questions

Problem 3IEE

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Given below are a set of foreign exchange quotes for several currencies against the Australiandollar as of August 5, 2020.Australian Dollar Exchange RatesCurrency Sell/buyUS, dollar 0.7143/0.7143UK, pound 0.5458/0.5459China, yuan Renminbi 4.9872/4.9907Hong Kong, dollar 5.5349/5.5364India, rupee 53.572/53.669Japan, yen 75.70/75.70Malaysia, ringgit 3.0104/3.0139Philippines, peso 34.953/35.135South Africa, rand 12.2272/12. 2340Switzerland, franc 0.6551/0.6551Thailand, baht 22.1892/22.2317(a) A friend of yours is totally confused by these rates. She is planning to visit Thailand next monthand wishes to purchase 10,000,000 Baht. How many Australian dollars does she require,assuming she is able to use the above quotes?(b) What are the direct quotes for the following currencies with respect to the Australian dollar?(i) UK pound(ii) Chinese Renminbi(iii) Indian rupee(iv) Malaysian ringgit(v) South African rand(c) Create a table showing the bid and ask quotes of each of the following currency…
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