Below are the spot and 3-month quotation for RM/EUR and RM/JPY Kuala Lumpur Quotations: 100 unit of Yen (¥) RM3.9730/55 82/62 Per unit of Euro (€) Spot 3-month forward RM4.4920/60 45/75 Calculate: 3-month forward outright rates for the Euro and Yen quotations

Below are the spot and 3-month quotation for RM/EUR and RM/JPY Kuala Lumpur Quotations: 100 unit of Yen (¥) RM3.9730/55 82/62 Per unit of Euro (€) Spot 3-month forward RM4.4920/60 45/75 Calculate: 3-month forward outright rates for the Euro and Yen quotations

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter7: International Arbitrage And Interest Rate Parity

Section: Chapter Questions

Problem 45QA

See similar textbooks

Related questions

Q: Spot exchange rate (AUD/USD) 1.7624/1.7864 Six- month expected spot rate (AUD/USD) 1.4880/1.5120;…

A: Given: Spot rate: 1USD = AUD 1.7624 / AUD 1.7864 Forward rate: 1USD = AUD 1.4880/ AUD 1.5120…

Q: The current USD/euro exchange rate is 1.4000 dollar per euro. The six month forward exchange rate is…

A: Given Information : Current USD/Euro Exchange rate = 1.400 dollar per euro Six month forward…

Q: Galina Works trades regularly with customers in different countries. Its home currency is the…

A: There are multiple sub parts. First three sub parts have been answered. This is a question on…

Q: Below are the spot and 3-month quotation for RM/EUR and RM/JPY Kuala Lumpur Quotations: Spot 3-month…

A: Data given: Spot rate ::100 Yen = RM 3.9730 - 3.9755 3 -month forward :: 100 Yen = RM 3.9782 -…

Q: a) Calculate the rate of forward premium of the euro on the 12-month forward exchange rate both for…

A: The price at which the currency can be purchased is known as spot price of the currency. If the spot…

Q: Below are the Kuala Lumpur market quotations of spot, 1-month and 3-month rate for RM/BND and…

A: "Since you have posted a question with multiple subparts, we will solve the first three subparts for…

Q: On November 1, 2019, Flower Company, a U.S. company, entered into a four-month forward contract to…

A: Introduction: A balance sheet is a financial statement showing a company's assets, liabilities, and…

Q: The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF).…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Calculate the cross rate between the EUR (the euro) and the INR (Indian rupee). Set it up as…

A: For Computing Cross Rate we first denote the Currency rate as follows A = INR B = USD C = EUR For…

Q: The following quotes are given as follows: Tunisian Dinar(TND) 1.43100=1 USD and USD2.59713=1 OMR…

A: TND/OMR = 1.43100 * 2.59713 = 3.71649

Q: If the spot rate is NZ$0.50/$ and the forward rate is NZ$0.55/$. The spot exchange rate and the…

A: Given: Spot rate: 1$ = NZ$ 0.5; 1$ = C$1.03. Forward rate: 1$ = NZ$0.55; 1$ = C$1.07

Q: The annualized forward (blank) for the Canadian dollar/U.S. dollar exchange rate when market…

A: Forward rate: It is the rate or price at which a contract is settled at a future date.

Q: An Indian bank displayed the spot rate, 30 days and 60 days forward rates for INR/USD as follows:…

A: The forward rate will be the spot rate plus the 60-day forward premium

Q: Use the following information for the next two questions: On December 1, 20x1, Entity A sells good…

A: Foreign exchange gain or loss is the gain or loss that occurs to the entity due to changes in the…

Q: Kuala Lumpur Quotations: Spot 3-month forward Per unit of Euro (€) RM4.4920/60 45/75 100 unit of Yen…

Q: Below are the spot and 3-month quotation for RM/EUR and RM/JPY Kuala Lumpur Quotations: 100 unit of…

Q: When the direct rate in the United States for the euro is USD 0.9568 per EUR, the reciprocal rate…

Q: If the spot rate is NZ$0.50/S and the forward rate is NZS0.55/S. The spot exchange rate and the…

A: Spot rate: It is the quoted price on any asset, or a security for instant settlement.

Q: The TRY (Turkish lira) against USD spot exchange rate is TRY1.79620= 1 USD and 4 month’s forward…

A: In finance, forward rates are used to hedge currency or interest rate exposures by organizations and…

Q: 1. Based on the following information, answer the problems showing procedure for each problem.…

A: In the foreign exchange market, a currency forward is a legally binding contract that locks in the…

Q: If the spot rate is NZ$0.50/S and the forward rate is NZ$0.55/S. The spot exchange rate and the…

A: A spot exchange rate means the current price level in the market at which one currency will be…

Q: The $/euro spot bid-ask rates are $1.0711-$1.0716. The 6-month forward points are 182-170. Determine…

A: Forward points are measured as the given points multiplied by (1/10,000), and added to the spot…

Q: if the spot rate is NZ$0.50/$ and the forward rate is NZ$0.55/$.The spot exchange rate and the…

A: The spot rates and futures rates in terms of two currencies can be calculated using the exchange…

Q: Spot Exchange Rate is GBP 1.83155 = 1 OMR (For Immediate Delivery). Instead of buying GBP…

A: In this case, the OMR is trading at a premium since the future rate is higher than the spot rate.

Q: The Spot Exchange Rate is OMR 0.385030 = 1 USD and 90 days forward rate is OMR 0.394030 = 1USD (Home…

A: Based on the above spot and future rates, it can be seen that the USD is trading at a premium.

Q: Suppose the following direct quotes are received for spot and 1-month French Francs in New York:…

A: In the given question we need to calculate the outright 30-day forward quote for the French from the…

Q: On December 1, 2017, Ringling Company (a U.S.-based company) entered into a three-month forward…

A: Compute the asset generated in the transaction: Asset = ($0.049 - $0.047) x $1,000,000…

Q: Based on market quotes on Canadian dollar (C$) Libor, the six- month C$ Libor and the nine- month C$…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you…

Q: If the spot rate is NZ$0.50/$ and the forward rate is NZ$0.55/S. The spot exchange rate and the…

A: Given:Spot rate=NZ$0.50Forward rate=NZ$0.55/8Spot exchange rate=C$1.03/$Forward rate=C$1.07/$To…

Q: Given the below quotes for the Japanese Yen and the Malaysian Ringgit, calculate the MYR/JPY cross…

A: USD/JPY 110.38 i.e. USD1 = JPY 110.38 USD/MYR 0.43. i.e. USD 1 = 0.43 MYR

Q: MrGyal buys and sells regularly with customers worldwide. Its home currency is the dollar. The…

A: Here, Receivable amount in 6 months is Euros 1.6 million Exchange Rates are as follows: Exchange…

Q: The current USD/Euro exchange rate is 1.4000 dollar per euro. The six month forward exchange rate is…

A: Current USD/EUR exchange rate = 1.4000 dollar per eur six month forward USD/Eur exchange rate =…

Q: Using the quotes from Exhibit 5.7, calculate the three-month forward cross-exchange rate for EUR/GBP…

A: Given: From the above table one should choose 3 months forward exchange rate for EURO and GBP. Three…

Q: As a foreign exchange trader at a Citibank, you are given the following quotations: 1-month 2-month…

A: Data given: Spot rate: 1S$ = RM 3.0500 /10 1 month forward 1S$ = RM 3.20 - 3.70 1S$ = Bid Rate…

Q: A product sells for $750 in the United States. The spot exchange rate is $1 to 1.56 Swiss francs. If…

A: The spot rate is referred as the rate of a foreign exchange contract where the delivery is immediate…

Q: ? The spot exchange rate is $1.250/euro 7 The six-month forward rate is $1.22/euro ? CVTS cost of…

A: A forward rate is a kinda of an interest rate which is significant to a financial transaction that…

Q: G H Ltd exports goods to Harlom Inc. All sales contracts are denominated in US dollars. Sales of…

A: Foreign Exchange Rate has a vital role in the export and import business, because these rates are…

Q: FinnCo purchases goods from its Mexican supplier on 1 November 20X1; the purchaseprice is 100,000…

A: Step 1 The difference due to foreign exchange will be recognized on profit and loss account as a…

Q: how many dollars would be required to purchase 1,000 units of each of the following: British pounds,…

A: Information Provided:

Q: The following market data relate to USD and Yen rates: Spot USD/YEN 116.00 3 months dollar deposit…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: Suppose you observe the following direct spot quotations in New York and Toronto, respectively: USD…

A: First, we will convert the rate of Toronto to match the quotation in Newyork. Then we will look…

Q: The 90-day forward rate for the euro is $1.07, while the current spot rate of the euro is $1.05. The…

A: Spot rate 1 Euro = $1.05 Forward rate 1 Euro = $1.07 Period = 90 days

Q: On January 1, 2021, Euro and USD exchange rate was 1.23 USD/EUR. Today, the Euro exchange rate is…

A: A rate through which individuals or companies convert their domestic currency with the other…

Concept explainers

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.

Question

Below are the spot and 3-month quotation for RM/EUR and RM/JPY
Kuala Lumpur Quotations:
100 unit of Yen (¥)
RM3.9730/55
82/62
Per unit of Euro (€)
Spot
3-month forward
RM4.4920/60
45/75
Calculate:
i.
3-month forward outright rates for the Euro and Yen quotations

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

The TRY (Turkish lira) against USD spot exchange rate is TRY1.79620= 1 USD and 4 month’s forward rate is quoted as TYR 1.62310 = 1 USD. Determine which country is at forward premium and which is forward discount?
The following are the prices in the foreign exchange market between the U.S. dollar and another local currency (LC). Spot $0.03112/LC 3-month forward $0.03117/LC 6-month forward $0.03118/LC What was the approximate discount or premium on a three-month forward for LC? A. 0.643% premium B. 0.013% premium C. 0.013% discount D. 0.643% discount
The annualized forward (blank) for the Canadian dollar/U.S. dollar exchange rate when market quotes are CAD1.38 per USD spot and CAD1.42 per USD quoted on a six month forward contract is (blank) a. discount; 2.90%. b. premium; 5.80%. c. premium; 2.90%. d. discount; 5.80%.
The Spot Exchange Rate is OMR 0.385030 = 1 USD and 90 days forward rate is OMR 0.394030 = 1USD (Home Currency is OMR, which is given as Direct quotes). Does the OMR is trading at premium or discount in 90 days forward market?
The $/euro spot bid-ask rates are $1.0711-$1.0716. The 6-month forward points are 182-170. Determine the $/euro 6-month forward bid-ask rates.
When the direct rate in the United States for the euro is USD 0.9568 per EUR, the reciprocal rate is: USD 1.0452 per EUR. EUR 0.0432 per USD USD 0.0432 per EUR. EUR 1.0452 per USD.
How to get the ans -1,874 basis points? pls explain with steps shown clearly Spot exchange rate (AUD/USD) 1.7624/1.7864 Six- month expected spot rate (AUD/USD) 1.4880/1.5120; Australian six-month interest rate 4.55/5.05% pa US six-month interest rate 1.18/1.68% pa Calculate the precise outward uncovered margin from an Australian perspective.
The current USD/EUR exchange rate is [de] dollar per euro. The one-year forward exchange rate is [fe]. The one-year USD interest rate is [rus]% p.a. semiannually compounded. Estimate the one-year EUR interest rate (p.a. semiannually compounded, stated in percent). Inputs: de, fe, rus = 1.85, 1.75, 1.31 Tip: Use the CIP
The following market data relate to USD and Yen rates:Spot USD/YEN 116.003 months dollar deposit rate 4.5%6 months dollar deposit rate 5%3 months yen deposit rate 0.25%6 months yen deposit rate 0.25%FRA rate for yen is nil a.What is a forward rate agreement? B .What would be the 6 month USD/Yen forward rate?C .What should be the 3 month USD FRA rate 3 months forward? D .The 6 and 12 month USD libors are 5% and 6.5% respectively. What should your bank do if another bank is quoting 6/12 USD FRA at 6.5 -6.75%?
Suppose you observe the following direct spot quotations in New York and Toronto,respectively: USD 0.8000-50 and CAD 1.2500-60. What are the arbitrage pr()fits per USD Imn?
When translating Acceletron’s fi nancial statements into US dollars, Redline is least likelyto use an exchange rate of USD per SGD:A . 0.671.B . 0.588.C . 0.654.
The current (spot) exchange rate is 1.2 dollars per euro, the 6-month forward exchange rate is 1.195 dollars per euro, the 6-month dollar interest rate is 1% per annum (continuous). The (no-arbitrage) 6-month euro interest rate (per annum continuous) is (a) 0.018% (b) 1.004% (c) 1.139% (d) 1.418% (e) 1.835%