posted a question
1. The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF) in June of 2009: Spot……………………..$0.8466 30-day forward……..$0.8504
90-day forward………$0.8540 180-day forward…….$0.8587
(a.) Was the Swiss franc selling at a discount or premium in the forward market?
(b.) What was the 30-day forward premium (or discount)?
(c.) What was the 90-day forward premium (or discount)?
d. 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?
(e.) Assume a Swiss bank entered into a 180-day forward contract with Citicorp to buy $100,000. How many francs will the Swiss bank deliver in six months to get the U.S. dollars?