EBK ENGINEERING ECONOMY
EBK ENGINEERING ECONOMY
16th Edition
ISBN: 9780133819014
Author: Koelling
Publisher: YUZU
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Chapter 8, Problem 36P
To determine

Impact of exchange rate fluctuations.

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USD 0.0202675=1 INR and USD 2.59713=1 OMR. The OMR is not quoted against INR. You are required to identify the following;  a)Determine the Exchange Rate for OMR/INR? How much INR the customer will be receiving if exchange OMR1,500?
At the start of May, you purchased some shares in Apple (a US company) for $US 43.87, and hedged your position using forward contracts (hedging the purchase value of the shares). The exchange rate at the time of purchase was $US1 = $NZ 2.73, while the one month NZ interest rate was 7.90% and the one month US interest rate was 7.30% (both rates are per annum, with monthly compounding). At the end of May, the exchange rate was $US1 = $NZ 2.78, while the shares were worth $US 41.63. Apple paid no dividends during May. What was your ($NZ) holding period return over the month of May?
Suppose 6-month Treasury bills are trading at a YTM of 1.6%, 12-month T-bills are trading at a YTM of 2.9%. If 18-month Treasury notes with a coupon rate of 3% are trading at par ($100), then what is the 18-month spot rate?
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