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1. Based on the following information, answer the problems showing procedure for each problem. CURRENCY SPOT & FORWARD RATES | TABLE_1 U.S./Can. $1 U.S. $1 Cdn Cdn.$ U.S. $ in in Country per unit per unit Cdn.$= U.S.$= 1.5833 0.6316 SPOT 1 month forward 1.5847 2 months forward 1.5861 3months forward 1.5879 6months forward 1.5932 12months forward 1.6041 3years forward 1.6328 5years forward 1.6538| 7years forward 1.6738 10years forward 1.7133 (pound) 2.4582 2.4559 2.454 2.4525 2.4474 2.4392 (euro) 1.5504 1.5497 1.549 1.5489 Britain 1.5526 1 m forward 2 m forward 3 m forward 6 m forward 12 m forward Europe 1 m forward 3 m forward 6 m forward 12 m forward 1.5506 Japan 0.631 1.5498 0.6305 0.6298 1.5472 1.5445 1.5362 1.5206 0.9792 0.9779 0.9755 0.9722 0.9666 0.6277 0.6234 0.6124 0.6047 0.5974 0.5837 (Yen) 0.013034 0.008232 1 m forward 0.013066 0.008245 3 m forward 0.013131 0.00827 6 m forward 0.013231 0.008305 12 m forward 0.013453 0.008387 Cdn.$ in 2001: High 1.5028 Low 1.6183 Average 1.5701 0.6654 0.6179 0.6369 http://www.bmo.com/economic/regular/fxrates.html. September 18, 2002. a) The premium or discount of the EURO with respect to the USD of a six month forward is: b) The premium or discount of the Japan Yen with respect to the CAD of a twelve month forward is: c) The premium or discount of the USD with respect to the British pound (GBP) of a two month forward is:

1. Based on the following information, answer the problems showing procedure for each problem. CURRENCY SPOT & FORWARD RATES | TABLE_1 U.S./Can. $1 U.S. $1 Cdn Cdn.$ U.S. $ in in Country per unit per unit Cdn.$= U.S.$= 1.5833 0.6316 SPOT 1 month forward 1.5847 2 months forward 1.5861 3months forward 1.5879 6months forward 1.5932 12months forward 1.6041 3years forward 1.6328 5years forward 1.6538| 7years forward 1.6738 10years forward 1.7133 (pound) 2.4582 2.4559 2.454 2.4525 2.4474 2.4392 (euro) 1.5504 1.5497 1.549 1.5489 Britain 1.5526 1 m forward 2 m forward 3 m forward 6 m forward 12 m forward Europe 1 m forward 3 m forward 6 m forward 12 m forward 1.5506 Japan 0.631 1.5498 0.6305 0.6298 1.5472 1.5445 1.5362 1.5206 0.9792 0.9779 0.9755 0.9722 0.9666 0.6277 0.6234 0.6124 0.6047 0.5974 0.5837 (Yen) 0.013034 0.008232 1 m forward 0.013066 0.008245 3 m forward 0.013131 0.00827 6 m forward 0.013231 0.008305 12 m forward 0.013453 0.008387 Cdn.$ in 2001: High 1.5028 Low 1.6183 Average 1.5701 0.6654 0.6179 0.6369 http://www.bmo.com/economic/regular/fxrates.html. September 18, 2002. a) The premium or discount of the EURO with respect to the USD of a six month forward is: b) The premium or discount of the Japan Yen with respect to the CAD of a twelve month forward is: c) The premium or discount of the USD with respect to the British pound (GBP) of a two month forward is:

International Financial Management
International Financial Management
14th Edition
ISBN:9780357130698
Author:Madura
Publisher:Madura
Chapter4: Exchange Rate Determination
Section: Chapter Questions
Problem 1BIC
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1. Based on the following information, answer the problems showing procedure for each problem. CURRENCY SPOT & FORWARD RATES TABLE_1 U.S./Can. $1 U.S. $1 Cdn Cdn.$ U.S. $ in in Country per unit per unit Cdn.$= U.S.$= 1.5833 0.6316 SPOT 1 month forward 1.5847 2 months forward 1.5861 3months forward 1.5879 6months forward 1.5932 12months forward 1.6041 3years forward 1.6328 5years forward 1.6538| 7years forward 1.6738 10years forward 1.7133 Britain 1 m forward 2 m forward 3 m forward 6 m forward 12 m forward Europe 1 m forward 3 m forward 6 m forward 12 m forward Japan (pound) 2.4582 2.4559 2.454 2.4525 2.4474 2.4392 1.5504 1.5497 1.549 1.5489 1.5506 (Yen) 0.013034 0.008232 1 m forward 0.013066 0.008245 1.5526 1.5498 1.5472 1.5445 1.5362 1.5206 0.9792 0.9779 0.9755 0.9722 0.9666 0.631 0.6305 0.6298 0.6277 0.6234 0.6124 0.6047 0.5974 0.5837 (euro) Cdn.$ in 2001: High 1.5028 Low 1.6183 Average 1.5701 0.6654 0.6179 0.6369 3 m forward 0.013131 0.00827 6 m forward 0.013231 0.008305 12 m forward 0.013453 0.008387 http://www.bmo.com/economic/regular/fxrates.html. September 18, 2002. a) The premium or discount of the EURO with respect to the USD of a six month forward is: b) The premium or discount of the Japan Yen with respect to the CAD of a twelve month forward is: c) The premium or discount of the USD with respect to the British pound (GBP) of a two month forward is:
Transcribed Image Text:1. Based on the following information, answer the problems showing procedure for each problem. CURRENCY SPOT & FORWARD RATES TABLE_1 U.S./Can. $1 U.S. $1 Cdn Cdn.$ U.S. $ in in Country per unit per unit Cdn.$= U.S.$= 1.5833 0.6316 SPOT 1 month forward 1.5847 2 months forward 1.5861 3months forward 1.5879 6months forward 1.5932 12months forward 1.6041 3years forward 1.6328 5years forward 1.6538| 7years forward 1.6738 10years forward 1.7133 Britain 1 m forward 2 m forward 3 m forward 6 m forward 12 m forward Europe 1 m forward 3 m forward 6 m forward 12 m forward Japan (pound) 2.4582 2.4559 2.454 2.4525 2.4474 2.4392 1.5504 1.5497 1.549 1.5489 1.5506 (Yen) 0.013034 0.008232 1 m forward 0.013066 0.008245 1.5526 1.5498 1.5472 1.5445 1.5362 1.5206 0.9792 0.9779 0.9755 0.9722 0.9666 0.631 0.6305 0.6298 0.6277 0.6234 0.6124 0.6047 0.5974 0.5837 (euro) Cdn.$ in 2001: High 1.5028 Low 1.6183 Average 1.5701 0.6654 0.6179 0.6369 3 m forward 0.013131 0.00827 6 m forward 0.013231 0.008305 12 m forward 0.013453 0.008387 http://www.bmo.com/economic/regular/fxrates.html. September 18, 2002. a) The premium or discount of the EURO with respect to the USD of a six month forward is: b) The premium or discount of the Japan Yen with respect to the CAD of a twelve month forward is: c) The premium or discount of the USD with respect to the British pound (GBP) of a two month forward is:
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