The current spot exchange rate is 150 and the three

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69) The current spot exchange rate is $1.50/€ and the three-month forward rate is $1.55/€. Based on youranalysis of the exchange rate, you are confident that the spot exchange rate will be $1.62/€ in threemonths. Assume that you would like to buy or sell €1,000,000. What actions do you need to take tospeculate in the forward market? What is the expected dollar profit from speculation?a.Sell €1,000,000 forward for $1.50/€.b.Buy €1,000,000 forward for $1.55/€.c.Wait three months, if your forecast is correct buy €1,000,000 at $1.62/€.d.Buy €1,000,000 today at $1.50/€; wait three months, if your forecast is correct sell €1,000,000 at$1.62/€.
70) When a currency trades at a premium in the forward market
71) When a currency trades at a discount in the forward market
72) The SF/$ spot exchange rate is SF1.25/$ and the 180 day forward exchange rate is SF1.30/$. The forwardpremium (discount) is
73) The €/$ spot exchange rate is $1.50/€ and the 120 day forward exchange rate is 1.45/€. The forwardpremium (discount) isa.the dollar is trading at an 8% premium to the euro for delivery in 120 days.b.the dollar is trading at a 5% premium to the Swiss franc for delivery in 120 days.c.the dollar is trading at a 10% discount to the euro for delivery in 120 days.d.the dollar is trading at a 5% discount to the euro for delivery in 120 days.
74) The €/$ spot exchange rate is $1.50/€ and the 90-day forward premium is 10 percent. Find the 90-dayforward price.
75) The SF/$ spot exchange rate is SF1.25/$ and the 180 day forward premium is 8 percent. What is theoutright 180 day forward exchange rate?
76) The SF/$ 180-day forward exchange rate is SF1.30/$ and the 180 day forward premium is 8 percent.What is the outright spot exchange rate?

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Term
Spring
Professor
George adanaia
Tags
Exchange Rate, Foreign exchange market

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