Use the following spot and forward bid-ask rates for the Japanese yen/U.S. dollar (¥/$) exchange rate from October 1, 2014, to answer the following questions: Period spot 1 month 2 months 3 months 6 months 12 months 24 months V/S Bid Rate 109.30 109.05 108.80 107.97 107.09 103.51 96.82 V/S Ask Rate 109.32 109.09 108.90 108.34 107.40 104.19 97.35 a. What is the mid-rate for each maturity? b. What is the annual forward premium for all maturities? c. Which maturities have the smallest and largest forward premiums?

Use the following spot and forward bid-ask rates for the Japanese yen/U.S. dollar (¥/$) exchange rate from October 1, 2014, to answer the following questions: Period spot 1 month 2 months 3 months 6 months 12 months 24 months V/S Bid Rate 109.30 109.05 108.80 107.97 107.09 103.51 96.82 V/S Ask Rate 109.32 109.09 108.90 108.34 107.40 104.19 97.35 a. What is the mid-rate for each maturity? b. What is the annual forward premium for all maturities? c. Which maturities have the smallest and largest forward premiums?

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter17: Multinational Financial Management

Section: Chapter Questions

Problem 5P: EXCHANGE RATES Table 17.1 lists foreign exchange rates for August 30, 2018. On that day, how many...

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Question 1 As a foreign exchange trader at Sumitomo Bank, one of your customers would like a yen quote on AUD. Current market rates are as follows: Spot ● ● ● ¥101.37-85/U.S.$ 1 A$1.2924-44/U.S.$ 1 30-day 15-13 20-26 a. What bid and ask yen cross rates would you quote on spot Australian dollars? . b. What outright yen cross rates would you quote on 30-day forward Australian dollars? • c. What is the forward premium or discount on buying 30-day Australian dollars against yen delivery?
You observe the following quoted money market rates: Bid Ask Spot exchange rate AUD1.185/USD AUD1.189/USD 95-day Forward exchange rate AUD1.341/USD AUD1.349/USD 95-day USD interest rate 5.57% p.a. 6.38% p.a. 95-day AUD interest rate 7.71% p.a. 8.81% p.a. What will your profit (in USD) be 95 days from now if you borrow USD3 million today and invest in Australia and then convert back to USD? In your calculations assume 360 days per year. a. -USD 361,605.85 b. -USD 352,934.10 C. -USD 272,802.68 d. -USD322,300.31 e. None of the options in this question.
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 A Dealer believes that the spot rate for the Dollar will rise to INR 45.00 by September 19. So he decides to buy at the money call options. If his expectations are correct, his profit from BUYING call options FOR USD1.5 Million will be INR______. a. 110,000 b. 100,000 c. 120,000 d. 80,000
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 76.25 76.32 0.9626 0.9634 1.0781 1.0795 AUD/CHF 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. Currency 1-month forward 3-month forward 1-year forward Pair points points points Bid Bid Ask Bid Ask 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.
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 $0.04 July 19 USD/INR Call 44.8000 Rs.0.12 Sep 19 USD/INR Put 44.8000 Rs.0.04 Sep 19 If a dealer is Bullish on USD. He should a. Sell EUR/USD Put Option b. Buy EUR/USD Call Option c. Buy EUR/USD Put Option d. None of the above
Bid/Ask on Dollar/Euro Forwards. Use the following spot and forward bid-ask rates for the U.S. dollar/euro (US$/€) from December 10, 2010, to answer the following questions: a. What is the mid-rate for each maturity? b. What is the annual forward premium for all maturities? (Click on the icon to import the table into a spreadsheet.) Period spot 1 month 2 months 3 months 6 months 12 months Bid Rate 1.3234 1.3233 1.3231 1.3227 1.3218 1.3197 Ask Rate D 1.3235 1.3234 1.3232 1.3229 1.3221 1.3201
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 Note: The quotes above are in the base currency/quote currency format. For instance, AUD/USD indicates that AUD is the base currency and USD is the quote currency. The quotes indicate how much of the quote currency is needed for you to get one unit of the base currency. a) Create a table showing the bid and ask quotes of each of the following currency pairs: USD/CAD; JPY/CAD; JPY/NZD; CHF/JPY. b) If you were to buy JPY 100,000 on September 21, how many Australian dollars do you need for the purchase at the above rate? c) If you were to sell NZD 250,000 on September 21, how many Australian dollars will you receive using the rate given above? 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…
Problem 4. Use the following spot and forward bid-ask rates for the U.S. dollar/euro (USS/€) exchange rate from December 10, 2010, toanswer the following questions: images below
Use the information below to answer the questions that follow. Japanese yen Japanese yen 6 month Australian dollar Australian dollar 3 month U.S. $ EQUIVALENT .00916 .00899 .7748 .7751 a. Yen b. Australian dollar c. Dollar relative to yen d. Dollar relative to A$ CURRENCY PER U.S. $ 109.20 111.21 1.2907 1.2902 a. Is the yen selling at a premium or a discount? b. Is the Australian dollar selling at a premium or a discount? c. Do you expect the value of the dollar to increase or decrease relative to the value of the yen? d. Do you expect the value of the dollar to increase or decrease relative to the value of the Australian dollar?
1) Assume the following exchange rates are indirect quotes, what are the equivalent direct quotes INDIRECT QUOTE DIRECT QUOTE $1=7.15 MXN (spot) ______________ $1=10.12 MXN (forward -30 day) ______________ $1=1.21 EUR _________.83_____ $1=120 JPY _________.0083_____ $1=1.7 CHF ___________.58___ 2) If you were comparing the price of hotel rooms in the above countries, the following would be the price in US dollars: 750 MXN (Spot) = _____________ 325 CHF = ________552.5_____ 650 EUR = _________786.5____ 40,000 JPY = ________4,800,000_____ 3) Suppose the Peso devalued by 15%, the hotel room in Mexico would now sell for __________Mexican Pesos which would equal ___________US dollars. 4) Suppose you exported something from Mexico to the US and were quoted a price (payable immediately) of 20,000 Pesos. What would your receipt in US dollars be? _____________. 5) Suppose you exported something from Mexico to the US and the payment…
eBook You use today's spot rate of the Brazilian real to forecast the spot rate of the real for one month ahead. Today's spot rate is $0.4517. Assume that you obtain the end-of-month spot exchange rates of the Brazilian real during the end of each of the last 6 months. End of Value of Month Brazilian real 1 $0.4255 2 0.4202 3 0.4194 4 0.4502 5 6 0.4598 0.4517 Use the value-at-risk method to determine the maximum percentage loss of the Brazilian real over the next month based on a 5 percent confidence level. Do not round intermediate calculations. Round your answer to two decimal places. % Forecast the exchange rate that would exist under these conditions. Do not round intermediate calculations. Round your answer to four decimal places.
1-The current spot exchange rate is $1.55/€ and the three-month forward rate is $1.50/€. You enter into a short three-month position on €1,000. At maturity, the spot exchange rate is $1.60/€. How much money have you made or lost? Made $150 Lost $100 Made €100 Lost $50