Poland zloty 0.3498 2.8588 0.3 Russia rublet 0.03282 30.469 0.5 Sweden krona 0.1490 6.7114 -6.2 Switzerland franc 1.0255 0.9751 -5.8 1-mos forward 1.0258 0.9748 -5.8 3-mos forward 1.0264 0.9743 -5.9 6-mos forward 1.0273 0.9734 -5.8 Turkey lira** UK pound 0.06922 1.4447 -3.4 1.5836 0.6315 2.1 1-mos forward 1.5832 0.6316 2.1 3-mos forward 1.5825 0.6319 2.1 6-mos forward 1.5815 0.6323 2.1 Middle East/Africa Bahrain dinar 2.6525 0.3770 Unch Egypt pound* 0.1757 5.6931 3.8 Israel shekel 0.2756 3.6284 -4.3 Jordan dinar 1.4129 0.7078 Unch Kuwait dinar 3.5167 0.2844 -0.9 Lebanon pound Saudi Arabia riyal 0.0006664 1,500.60 -0.1 0.2666 3.7509 Unch South Africa rand 0.1441 6.9396 -6.3 UAE dirham 0.2723 3.6724 Unch SDR† 1.5587 0.6416 0.6 *Floating rate; †Financial government rate; #Russian central bank rate; **Rebased as of January 1, 2005; ttSpecial drawing rights (SDRS) from the International Monetary Fund based on exchange rates for U.S., British, and Japanese currencies. Note: Based on trading among banks of $1 million and more, as quoted at 4 P.M. EST by Reuters. Source: Wall Street Journal, October 29, 2011. It is important to remember that the direct and indirect quotes are exactly the same thing since one is the exact reciprocal of the other. For example, the rela- tionship between the direct and indirect €/$ exchange rate quotations is simply: 1 €0.76/$= 1 or Ses(t) =: Ses(t) $1.31/€ EXHIBIT 5.5 U.S. Dollar Foreign Exchange Rates in Late New York Trading for Oc- tober 29, 2011 Country/Currency In US$ Per USS YTD Chg (%) Americas Argentina peso* 0.2525 3.9604 4.2 Brazil real 0.5930 1.6863 -3.3 Canada dollar 0.9802 1.0202 -3.0 1-mos forward 0.9795 1.0209 -2.9 3-mos forward 0.9780 1.0225 -2.7 6-mos forward 0.9758 1.0248 -2.5 Chile peso Colombia peso 0.002079 481.00 -5.2 0.0005563 1,797.59 -12.0 Ecuador U.S. dollar 1 Unch Mexico peso* 0.0798 12.5376 -4.1 Peru new sol 0.3585 2.789 -3.5 Uruguay pesot 0.04940 20.24 3.6 Venezuela b. fuerte 0.232851 4.2946 100.0 Asia-Pacific Australian dollar 0.9730 1.0277 -7.7 China yuan 0.1495 6.6900 -2.0 Hong Kong dollar India rupee Indonesia rupiah 0.1289 7.7588 0.1 0.02254 44.366 -4.4 0.0001121 8,921 -5.4 Japan yen 1-mos forward 0.012004 83.31 -10.5 0.012007 83.28 -10.5 3-mos forward 0.012017 83.22 -10.6 6-mos forward 0.012033 83.10 -10.6 Malaysia ringgit 0.3241 3.0855 -9.9 New Zealand dollar 0.7441 1.3439 -2.5 Pakistan rupee 0.01159 86.281 2.2 Philippines peso Singapore dollar South Korea won 0.0229 43.745 -5.9 0.7623 1.3118 -6.7 0.0008842 1,130.97 -3.0 Taiwan dollar 0.03195 31.299 -2.2 Thailand baht 0.03314 30.175 -9.5 Vietnam dong 0.00005131 19,490 5.5 Europe Czech Rep. koruna 0.05640 17.731 -3.8 Denmark krone 0.1849 5.4083 4.1 Euro area euro 1.3780 0.7257 3.9 Hungary forint Norway krone Poland zloty 0.005029 198.85 5.2 0.1716 5.8275 0.5 0.3498 2.8588 0.3 Russia rublet 0.03282 30.469 0.5 Sweden krona 0.1490 6.7114 -6.2 Switzerland franc 1.0255 0.9751 -5.8
Poland zloty 0.3498 2.8588 0.3 Russia rublet 0.03282 30.469 0.5 Sweden krona 0.1490 6.7114 -6.2 Switzerland franc 1.0255 0.9751 -5.8 1-mos forward 1.0258 0.9748 -5.8 3-mos forward 1.0264 0.9743 -5.9 6-mos forward 1.0273 0.9734 -5.8 Turkey lira** UK pound 0.06922 1.4447 -3.4 1.5836 0.6315 2.1 1-mos forward 1.5832 0.6316 2.1 3-mos forward 1.5825 0.6319 2.1 6-mos forward 1.5815 0.6323 2.1 Middle East/Africa Bahrain dinar 2.6525 0.3770 Unch Egypt pound* 0.1757 5.6931 3.8 Israel shekel 0.2756 3.6284 -4.3 Jordan dinar 1.4129 0.7078 Unch Kuwait dinar 3.5167 0.2844 -0.9 Lebanon pound Saudi Arabia riyal 0.0006664 1,500.60 -0.1 0.2666 3.7509 Unch South Africa rand 0.1441 6.9396 -6.3 UAE dirham 0.2723 3.6724 Unch SDR† 1.5587 0.6416 0.6 *Floating rate; †Financial government rate; #Russian central bank rate; **Rebased as of January 1, 2005; ttSpecial drawing rights (SDRS) from the International Monetary Fund based on exchange rates for U.S., British, and Japanese currencies. Note: Based on trading among banks of $1 million and more, as quoted at 4 P.M. EST by Reuters. Source: Wall Street Journal, October 29, 2011. It is important to remember that the direct and indirect quotes are exactly the same thing since one is the exact reciprocal of the other. For example, the rela- tionship between the direct and indirect €/$ exchange rate quotations is simply: 1 €0.76/$= 1 or Ses(t) =: Ses(t) $1.31/€ EXHIBIT 5.5 U.S. Dollar Foreign Exchange Rates in Late New York Trading for Oc- tober 29, 2011 Country/Currency In US$ Per USS YTD Chg (%) Americas Argentina peso* 0.2525 3.9604 4.2 Brazil real 0.5930 1.6863 -3.3 Canada dollar 0.9802 1.0202 -3.0 1-mos forward 0.9795 1.0209 -2.9 3-mos forward 0.9780 1.0225 -2.7 6-mos forward 0.9758 1.0248 -2.5 Chile peso Colombia peso 0.002079 481.00 -5.2 0.0005563 1,797.59 -12.0 Ecuador U.S. dollar 1 Unch Mexico peso* 0.0798 12.5376 -4.1 Peru new sol 0.3585 2.789 -3.5 Uruguay pesot 0.04940 20.24 3.6 Venezuela b. fuerte 0.232851 4.2946 100.0 Asia-Pacific Australian dollar 0.9730 1.0277 -7.7 China yuan 0.1495 6.6900 -2.0 Hong Kong dollar India rupee Indonesia rupiah 0.1289 7.7588 0.1 0.02254 44.366 -4.4 0.0001121 8,921 -5.4 Japan yen 1-mos forward 0.012004 83.31 -10.5 0.012007 83.28 -10.5 3-mos forward 0.012017 83.22 -10.6 6-mos forward 0.012033 83.10 -10.6 Malaysia ringgit 0.3241 3.0855 -9.9 New Zealand dollar 0.7441 1.3439 -2.5 Pakistan rupee 0.01159 86.281 2.2 Philippines peso Singapore dollar South Korea won 0.0229 43.745 -5.9 0.7623 1.3118 -6.7 0.0008842 1,130.97 -3.0 Taiwan dollar 0.03195 31.299 -2.2 Thailand baht 0.03314 30.175 -9.5 Vietnam dong 0.00005131 19,490 5.5 Europe Czech Rep. koruna 0.05640 17.731 -3.8 Denmark krone 0.1849 5.4083 4.1 Euro area euro 1.3780 0.7257 3.9 Hungary forint Norway krone Poland zloty 0.005029 198.85 5.2 0.1716 5.8275 0.5 0.3498 2.8588 0.3 Russia rublet 0.03282 30.469 0.5 Sweden krona 0.1490 6.7114 -6.2 Switzerland franc 1.0255 0.9751 -5.8
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
9th Edition
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter17: Multinational Financial Management
Section: Chapter Questions
Problem 5P
Related questions
Question
Forward premiums/discounts. Referring to the forward quotes in the Wall Street Journal (Exhibit 5.5) for the Japanese yen, determine whether the yen is at a premium or discount against the U.S. dollar. What is the percentage premium/discount for maturities of one, three, and six months?
Included images for reference
Transcribed Image Text:Poland zloty
0.3498
2.8588
0.3
Russia rublet
0.03282
30.469
0.5
Sweden krona
0.1490
6.7114
-6.2
Switzerland franc
1.0255
0.9751
-5.8
1-mos forward
1.0258
0.9748
-5.8
3-mos forward
1.0264
0.9743
-5.9
6-mos forward
1.0273
0.9734
-5.8
Turkey lira**
UK pound
0.06922
1.4447
-3.4
1.5836
0.6315
2.1
1-mos forward
1.5832
0.6316
2.1
3-mos forward
1.5825
0.6319
2.1
6-mos forward
1.5815
0.6323
2.1
Middle East/Africa
Bahrain dinar
2.6525
0.3770
Unch
Egypt pound*
0.1757
5.6931
3.8
Israel shekel
0.2756
3.6284
-4.3
Jordan dinar
1.4129
0.7078
Unch
Kuwait dinar
3.5167
0.2844
-0.9
Lebanon pound
Saudi Arabia riyal
0.0006664
1,500.60
-0.1
0.2666
3.7509
Unch
South Africa rand
0.1441
6.9396
-6.3
UAE dirham
0.2723
3.6724
Unch
SDR†
1.5587
0.6416
0.6
*Floating rate; †Financial government rate; #Russian central bank rate; **Rebased as of
January 1, 2005; ttSpecial drawing rights (SDRS) from the International Monetary Fund
based on exchange rates for U.S., British, and Japanese currencies.
Note: Based on trading among banks of $1 million and more, as quoted at 4 P.M. EST by
Reuters.
Source: Wall Street Journal, October 29, 2011.
It is important to remember that the direct and indirect quotes are exactly the
same thing since one is the exact reciprocal of the other. For example, the rela-
tionship between the direct and indirect €/$ exchange rate quotations is simply:
1
€0.76/$=
1
or Ses(t) =:
Ses(t)
$1.31/€
Transcribed Image Text:EXHIBIT 5.5 U.S. Dollar Foreign Exchange Rates in Late New York Trading for Oc-
tober 29, 2011
Country/Currency
In US$
Per USS
YTD Chg (%)
Americas
Argentina peso*
0.2525
3.9604
4.2
Brazil real
0.5930
1.6863
-3.3
Canada dollar
0.9802
1.0202
-3.0
1-mos forward
0.9795
1.0209
-2.9
3-mos forward
0.9780
1.0225
-2.7
6-mos forward
0.9758
1.0248
-2.5
Chile peso
Colombia peso
0.002079
481.00
-5.2
0.0005563
1,797.59
-12.0
Ecuador U.S. dollar
1
Unch
Mexico peso*
0.0798
12.5376
-4.1
Peru new sol
0.3585
2.789
-3.5
Uruguay pesot
0.04940
20.24
3.6
Venezuela b. fuerte
0.232851
4.2946
100.0
Asia-Pacific
Australian dollar
0.9730
1.0277
-7.7
China yuan
0.1495
6.6900
-2.0
Hong Kong dollar
India rupee
Indonesia rupiah
0.1289
7.7588
0.1
0.02254
44.366
-4.4
0.0001121
8,921
-5.4
Japan yen
1-mos forward
0.012004
83.31
-10.5
0.012007
83.28
-10.5
3-mos forward
0.012017
83.22
-10.6
6-mos forward
0.012033
83.10
-10.6
Malaysia ringgit
0.3241
3.0855
-9.9
New Zealand dollar
0.7441
1.3439
-2.5
Pakistan rupee
0.01159
86.281
2.2
Philippines peso
Singapore dollar
South Korea won
0.0229
43.745
-5.9
0.7623
1.3118
-6.7
0.0008842
1,130.97
-3.0
Taiwan dollar
0.03195
31.299
-2.2
Thailand baht
0.03314
30.175
-9.5
Vietnam dong
0.00005131
19,490
5.5
Europe
Czech Rep. koruna
0.05640
17.731
-3.8
Denmark krone
0.1849
5.4083
4.1
Euro area euro
1.3780
0.7257
3.9
Hungary forint
Norway krone
Poland zloty
0.005029
198.85
5.2
0.1716
5.8275
0.5
0.3498
2.8588
0.3
Russia rublet
0.03282
30.469
0.5
Sweden krona
0.1490
6.7114
-6.2
Switzerland franc
1.0255
0.9751
-5.8
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