Spot and forward rates (LO21-2) 1. The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF): a. b. C. d. e. Spot 30-day forward 90-day forward 180-day forward $0.8202 $0.8244 $0.8295 $0.8343 Was the Swiss franc selling at a discount or premium in the forward market? What was the 30-day forward premium (or discount)? What was the go-day forward premium (or discount)? Suppose you executed a 90-day forward contract to exchange 100,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $100,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars?

Spot and forward rates (LO21-2) 1. The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF): a. b. C. d. e. Spot 30-day forward 90-day forward 180-day forward $0.8202 $0.8244 $0.8295 $0.8343 Was the Swiss franc selling at a discount or premium in the forward market? What was the 30-day forward premium (or discount)? What was the go-day forward premium (or discount)? Suppose you executed a 90-day forward contract to exchange 100,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $100,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars?

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 40QA

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