he following are the spot and the swap forward rates of the ZAR/EUR Spot 15.7500–15.9500 One-month 400–205 This means that the rand is selling at a forward discount. the rand is selling at a forward premium. the euro dollar is selling at a forward discount. Both b) and c) after allowing for transaction costs, both currencies sell at par.
he following are the spot and the swap forward rates of the ZAR/EUR Spot 15.7500–15.9500 One-month 400–205 This means that the rand is selling at a forward discount. the rand is selling at a forward premium. the euro dollar is selling at a forward discount. Both b) and c) after allowing for transaction costs, both currencies sell at par.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
The following are the spot and the swap forward rates of the ZAR/EUR
Spot 15.7500–15.9500
One-month 400–205
This means that
Spot 15.7500–15.9500
One-month 400–205
This means that
the rand is selling at a forward discount.
|
||
the rand is selling at a forward premium.
|
||
the euro dollar is selling at a forward discount.
|
||
Both b) and c)
|
||
after allowing for transaction costs, both currencies sell at par.
|
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