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Unformatted text preview: Answer the following, based on the above quotations. a. What are the spot, 1-month, 3-month, and 6-month forward bid and ask rates? b. How much would you receive in HKD if you sold EUR1,000,000 spot? c. How much would it cost you in HKD to purchase EUR2,000,000 three months forward? 3. Assume the following information: Spot rate: USD1.1250/CHF 6-month forward rate: USD1.1320/CHF 6-month CHF interest rate: 3% p.a. 6-month USD interest rate: 4% p.a. Given this information, is covered interest arbitrage worthwhile for U.S. investors? If so, explain the arbitrage operations and compute the profit if you have USD1,000,000 to use....
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This note was uploaded on 12/02/2011 for the course BUSINESS 0902102028 taught by Professor Issam during the Spring '10 term at Bradford School of Business.
- Spring '10
- International Finance