Bid ask bid ask problem 612 canuck exports days

This preview shows page 11 - 12 out of 12 pages.

Bid ($/)Ask ($/)Bid ($/)Ask ($/)
Problem 6.12 Canuck ExportsA Canadian exporter, Canuck Exports, will be receiving six payments of €12,000, ranging from now to 12 months in the future. Since the company keeps cash balances in both Canadian dollars and U.S. dollars, it can choose which currency to change the euros to at the end of the various periods. Which currency appears to offer the better rates in the forward market?DaysPeriodForwardC$/euroUS$/eurospot1.33601.32211 month301.33681.32302 months601.33761.32283 months901.33821.32246 months1801.34061.321512 months3601.34621.3194DaysForward PremiumC$ Proceeds ofDifferencePeriodForwardC$/euroon the C$/euro€ 12,000.00 Over Spotspot1.3360 16,032.00 - 1 month301.3368 0.722%16,041.65 $9.652 months601.3376 0.705%16,050.84 $18.843 months901.3382 0.659%16,058.41 $26.416 months1801.3406 0.693%16,087.54 $55.5412 months3601.3462 0.765%16,154.69 $122.69DaysForward PremiumUS$ Proceeds ofDifferencePeriodForwardUS$/euroon the US$/euro€ 12,000.00 Over Spotspot1.3221 $15,865.20 - 1 month301.3230 0.817%$15,876.00 $10.80 2 months601.3228 0.318%$15,873.60 $8.40 3 months901.3224 0.091%$15,868.80 $3.60 6 months1801.3215 -0.091%$15,858.00 ($7.20)12 months3601.3194 -0.204%$15,832.80 ($32.40)

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture