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Study this case and answer question asked below:
Spot USD / JPY 116.00
3 Months DOLLAR Deposit Rate 4.50% p.a.
6 Months DOLLAR Deposit Rate 5.00% p.a.
3 Months YEN Deposit Rate 0.25% p.a.
6 Months YEN Deposit Rate 0.52% p.a.
FRA Rate for Yen Nil
A forward rate agreement (FRA) is
Step by step
Solved in 2 steps
- The following market data relate to USD and Yen rates:Spot USD/YEN 116.003 months dollar deposit rate 4.5%6 months dollar deposit rate 5%3 months yen deposit rate 0.25%6 months yen deposit rate 0.25%FRA rate for yen is nil a.What is a forward rate agreement? B .What would be the 6 month USD/Yen forward rate?C .What should be the 3 month USD FRA rate 3 months forward? D .The 6 and 12 month USD libors are 5% and 6.5% respectively. What should your bank do if another bank is quoting 6/12 USD FRA at 6.5 -6.75%?Study this case and answer question asked below: Spot USD / JPY 116.00 3Months DOLLAR Deposit Rate 4.50% p.a. 6 Months DOLLAR Deposit Rate 5.00% p.a. 3 Months YEN Deposit Rate 0.25% p.a. 6 Months YEN Deposit Rate 0.52% p.a. FRA Rate for Yen Nil What should be 3 month USD FRA Rate 3 months Forward? a. 4.75% b. 5.44% c. 9.5% d. 5.66%Find the periodic payment for each of the following scenarios, where m is the periodic deposit and r is the interest rate. Future compounding time periodic interest in Value frequency deposit (m) earned years $ $200,000 5% annually 10 12.5779 15905.29 $ $250,000 7.8% semiannually 11 34.6003 7225.43 $ $125,000 3.7% quarterly 15 120.3921 1038.46 $ $ $225,000 3% monthly 15 $ $175,000 7.5% weekly 12 A
- Calculate the nominal annual cost of nonfree trade credit under each of the following terms. Assume that payment is made either on the discount date or on the due date. a. 1/15, net 20 b. 2/10, net 60 c. 3/10, net 45 d. 2/10, net 45 e. 2/15, net 40Time. Deposit borrowing Rate. Rate 3 month. 4%. 4.2 6 month. 4.60%. 4.9 9 month. 5.2. 5.4 12 month. 5.5. 5.8 An MNC company would deposit $45mil in 3 month for 3 month . The company decide to enter FRA Agreement suppose the company decide to buy a EuroDollar cont 1. What is the Eurodollar contrace? How many contract should MNC buy? Explain 2. What is the quoted price of this contract? 3. What is the quoted price of this contract after 3 month ? 4. How many pips (base point) did the rate move? 5. How much is the profit or the loss of the company ?You sold goods for USD 2 million and expected to receive the proceeds in 2 months. You entered into a forward exchange contract (“FEC”) at AUD/USD 0.9600. You have been advised your customer cannot pay the USD 2m until 3 months after the FEC date. Your bank agrees that you can extend your FEC at the historical rate. Current spot rate is AUD/USD 0.8800 with USD and AUD interest rates 1% pa and 6% pa respectively. What is the approximate amount of AUD you will now receive at the revised future date: Select one: A. AUD 2,301,000 B. AUD 2,083,000 C. AUD 2,273,000 D. AUD 2,109,000
- P is required to pay $300,000 in 1year, forward rate 1$ = 765 and spot rate 1$=760. Particulars India US 1 year Deposit Rate 1 year Borrowing Rate 5.00% 5.50% 4.50% 5.00% Calculate the amount payable under money market hedge.Calculate the principal and interest portions of the specified payment for this ordinary annuty, and give the balance remaining after that payment For full marks your answer should be rounded to the nearest cont Payment Principal Interest Balance Payment Frequency Term Number to Find Interest Payment Loan Principal Paid Paid After Payment 4. 0.00 0.00 0.00 $45,000.00 3.50 % compounded quarterly $3,250.97 Semi-annual 8 yearsCalculate the one year forward exchange rate using the direct method: Spot Rate $ 1.4830 / € U.S Libor (1 Year) 2.50 % Euro Libor (1 Year) 4.15 % Explain arbitrage condition underlying your work
- Find the periodic payment for each of the following scenarios, where m is the periodic deposit and r is the interest rate. Future Value r $200,000 7.4% annually $25,000 5.1% semiannually $100,000 4.4% compounding time periodic in frequency years $150,000 5.5% $150,000 2.4% quarterly monthly weekly 5 13 13 deposit (m) $ $ tA $ interest earned 10000Cash is borrowed on a 2-month note payable. If the interest cost to borrow is RO 400, and the cash proceeds received and available to use for the 60-day period is RO19600 what is the actual interest rate on this note? a. 12.24% b. 12.00% c. 10.00% d. 12.45%Find the payment necessary to amortize the following loan. S7500, 8.8% compounded semiannually; 18 semiannual payments The payment is S (Round to the nearest cent as needed.)
