A U.S. bank converted $1 million to Swiss francs to make a Swiss franc loan to a valued corporate customer when the exchange rate was 1.2 francs per dollar. The borrower agreed to repay the principal plus 6 percent interest in one year. The borrower repaid Swiss francs at loan maturity and when the loan was repaid the exchange rate was 1.25 francs per dollar. What was the bank's dollar rate of return? 1.53% 1.76% 1.85% 2.01% On July 15, 2022, you convert 480,000 U.S. dollars to Japanese yen in the spot foreign exchange market at the spot rate of ¥104.91/$ and purchase a six-month forward contract to convert yen into dollars at the forward rate of $0.0095320/¥. How much will you receive in U.S. dollars at the end of six months? $497,668 $502,388 $458,773 $480,001
A U.S. bank converted $1 million to Swiss francs to make a Swiss franc loan to a valued corporate customer when the exchange rate was 1.2 francs per dollar. The borrower agreed to repay the principal plus 6 percent interest in one year. The borrower repaid Swiss francs at loan maturity and when the loan was repaid the exchange rate was 1.25 francs per dollar. What was the bank's dollar
| 1.53% | ||
| 1.76% | ||
| 1.85% | ||
| 2.01% |
On July 15, 2022, you convert 480,000 U.S. dollars to Japanese yen in the spot foreign exchange market at the spot rate of ¥104.91/$ and purchase a six-month forward contract to convert yen into dollars at the forward rate of $0.0095320/¥. How much will you receive in U.S. dollars at the end of six months?
| $497,668 | ||
| $502,388 | ||
| $458,773 | ||
| $480,001 |
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 6 images
