Forward premium: a) The current price of a pound in Toronto is 1.2345. The 30 days price of the pound in Toronto's forward market is 1.1357. What is the annualized forward premium for Canarian dollars? b) Spot and 60 days forward dollar indirect quotes for yen are 100.2468 and 101.0305. What is the annualized dollar forward premium?

Forward premium: a) The current price of a pound in Toronto is 1.2345. The 30 days price of the pound in Toronto's forward market is 1.1357. What is the annualized forward premium for Canarian dollars? b) Spot and 60 days forward dollar indirect quotes for yen are 100.2468 and 101.0305. What is the annualized dollar forward premium?

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 27QA

See similar textbooks

Similar questions

b. What is the annual forward premium on the yen for all maturities? (Assume that the U.S. dollar is the home currency.) The annual forward premium is: Forward premium= The annual forward premium for all maturities is calculated below: Period Spot rateMid-Rate -Forward rateMid-Rate Forward rateMid-Rate Spot 1 month 2 months 3 months 6 months 12 months 24 months Days Forward 0 30 60 90 180 380 720 Bid Rate \/$ 85.60 86.20 86.03 85.57 84.43 84.17 83.11 x(360/Days) Ask Rate \/$ 85.65 86.24 86.08 85.61 84.46 84.21 83.16 Forward Premium -8.281 % -2.998 0.164 2.795 1.705 1.498
The spot rate on the London market is £0.5520/$, while the 90-day forward rate is £0.5589/$. What is the annualized forward premium or discount on the British pound? (Round answer to 2 decimal places, e.g. 17.54%. Use 360 days for calculation.) Forward premium or (discount) %
Forward premiums/discounts. Referring to the forward quotes in the Wall Street Journal (Exhibit 5.5) for the Japanese yen, determine whether the yen is at a premium or discount against the U.S. dollar. What is the percentage premium/discount for maturities of one, three, and six months? Included images for reference
The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF): Spot $0.820230-day forward $0.824490-day forward $0.8295180-day forward $0.8343Was 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 90-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?
You observe that the current spot price for the Singapore dollar (SGD) is $0.60. What is the three-month three-month forward rate if the three-month forward premium(+)/discount (-) is 9.66%?
1) The difference between direct and indirect quotes: What is a direct pound for euro quote? What is a direct dollar quote for pound? What is an indirect dollar quote for yen? What is the indirect Swiss franc for pound quote? 2) Nominal annualized realized appreciation: Two months ago the price of a dollar in Tokyo was 95.6789. Today it is 93.5432. What is annualized realized yen appreciation? Four months ago direct dollar quote for pound was 1.2468. Today it is 1.1357. What is annualized realized pound appreciation? 3) Appreciation vs depreciation: How much did the dollar appreciate if the euro depreciated 3.5778% against the dollar? 4) Buying and selling For-Ex with bid-as quotes: How many dollars do you need to buy 3 million euros if the indirect dollar quote for euro is 0.8972-13? How many Swiss francs will you get from one billion yen if the price of Swiss franc in Tokyo is 101.3050-15? How many dollars will you get from 6 million pounds if the direct dollar quote for…
) In another case are these quotes: Spot rate €1.2562/£; 1 month forward €1.2662/£. Which of the two currencies is trading at forward premium?
Spot rate: Given the following direct quotes, calculate the equivalent indirect quotes. A: $0.095/Mexican Pesos B: £0.75/€ C: Rupees 35.20/C$
Assume the following: Spot USDBRL = 5.0500 1YR USD Money Market Rates = 1.50% 1YR BRL Money Market Rates = 9.00% What is the 1YR USDBRL forward rate? (Recall that Money Market Rates are quoted as annualized rates)
The six-month interest rate of Austrilian dollar is 9 percent while the six-month interest rate for US dollar is 6.75 percent. At the same time, the spot Austrilian dollar quotation in New York is US$0.9100 and the six-month forward rate is US$0.9025. Analyse the information provided above to answer the following questions: i) Critically evaluate whether there is interest rate parity in this situation. Provide relevant calculations to support your answer. ii) Critically discuss whether, and how, it might be possible to make a profit in this situation
The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($ per SF). Spot $ 0.8210 $ 0.8520 30-day forward 90-day forward $ 0.8548 180-day forward $ 0.8595 a. Was the Swiss franc selling at a discount or premium in the forward market? Premium Discount b. What was the 30-day forward premium (or discount) percentage? Note: Do not round Intermediate calculations. Input your answer as a percent rounded to 2 decimal places. 30-day forward premium/discount c. What was the 90-day forward premium (or discount) percentage? Note: Do not round Intermediate calculations. Input your answer as a percent rounded to 2 decimal places. 90-day forward premium/discount 96 Dollars for Swiss francs d. Suppose you executed a 90-day forward contract to exchange 180,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? 96 Swiss francs for dollars SF e. Assume a Swiss bank entered into a 180-day forward contract with Bankers Trust to buy $180,000. How…
) In another case are these quotes: Spot rate €1.2562/£; 1 month forward €1.2662/£ Which of the two currencies is trading at forward discount? And why