Spot exchange rate (AUD/USD) 1.7624/1.7864 Six- month expected spot rate (AUD/USD) 1.4880/1.5120; Australian six-month interest rate 4.55/5.05% pa US six-month interest rate 1.18/1.68% pa Calculate the precise outward uncovered margin from an Australian perspective.
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How to get the ans -1,874 basis points? pls explain with steps shown clearly
Spot exchange rate (AUD/USD) 1.7624/1.7864
Six- month expected spot rate (AUD/USD) 1.4880/1.5120;
Australian six-month interest rate 4.55/5.05% pa
US six-month interest rate 1.18/1.68% pa
Calculate the precise outward uncovered margin from an Australian perspective.
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- The current USD/EUR exchange rate is [de] dollar per euro. The one-year forward exchange rate is [fe]. The one-year USD interest rate is [rus]% p.a. semiannually compounded. Estimate the one-year EUR interest rate (p.a. semiannually compounded, stated in percent). Inputs: de, fe, rus = 1.85, 1.75, 1.31 Tip: Use the CIPConsider the following table, which reports the spot exchange rate between the dollar and the pound, as well as the interest rates in the UK and the US (standard notation applies): 5 S/£ exchange rate r UK (%)r US (%) spot S1.1122/£1 1 month 2.1 2.1 3 month 2.5 2.9 6 month 2.9 4 1 year 4.1 4.5 Showing all your calculations, evaluate the 1 - month, 1-year, 3- month, and 6-month forward exchange rate between the pound and the dollar.You are given the following information:Spot exchange rate (AUD/EUR) 1.60One-year forward rate (AUD/EUR) 1.62One-year interest rate on the Australian dollar 8.5%One-year interest rate on the euro 6.5%(a) Is there any violation of CIP?(b) Calculate the covered margin (going short on the AUD).(c) Calculate the interest parity forward rate and compare it with the actual forward rate.
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- Study this Case and Answer Question Asked Below: On 19 April Following are the Spot Rates Spot EUR/USD 1.2000 USD/INR 44.8000 Following are the quotes for European Type Options Currency Pair Call/Put Strike Price Premium Expiry Date EUR/USD Call 1.2000 $0.035 July 19 EUR/USD Put 1.2000 $0.04 July 19 USD/INR Call 44.8000 Rs.0.12 Sep 19 USD/INR Put 44.8000 Rs.0.04 Sep 19 If a dealer is Bullish on USD. He should a. Sell EUR/USD Put Option b. Buy EUR/USD Call Option c. Buy EUR/USD Put Option d. None of the aboveUsing the quotes from Exhibit 5.7, calculate the three-month forward cross-exchange rate for EUR/GBP (X.XXXX)If the spot rateis NZ$0.50 $and the forward rate is NZ$0.55/8.The shot exchange raterate and the forwardor C$1.031$ and c$1.07/8.rateCompute the percentage change in the NZ$/C$ during this period.
- If one year forward rate is EUR2.1830/OMR and interest rate for EURO is 6% per annum and for OMR is 8% per annum. What should be spot exchange rate if interest rate parity holds and OMR is the Home currency? EUR2.14257/OMR USD2.0819/OMR USD2.22418/OMR None of these€ 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?Suppose you have the following spot exchange rates: USD/AUD 0.5300 AUD/EUR 1.6428 USD/EUR 0.8782 a) Calculate the US dollar profit (per 1 USD), if any, on a three-point arbitrage. b) Calculate AUD profit (per 1 AUD), if any, on a three-point arbitrage. c) How can you explain the answers in (1) and (2)?