he following are the spot and the swap forward rates of the AUD/USD  Spot                                        1.2500–1.2550  One-month                           40–20  This means that     the US dollar is selling at a forward discount.     the US dollar is selling at a forward premium.     the Australian dollar is selling at a forward discount.     after allowing for transaction costs, both currencies sell at par.

Q: what is the 6-month forward exchange rate? Do not round intermediate calculations. Round your answer…

A: Information Provided: Nominal rate (T-Bills) = 3% (Six-months) Japanese bonds nominal rate = 1.45%…

Q: The following are the prices in the foreign exchange market between the U.S. dollar and another…

A: Given: Spot rate =$0.03112/LC3 month forward =$0.03117/LC

Q: he following are the spot and the swap forward rates of the ZAR/EUR Spot…

A: If forward points are higher for bid and lower for ask, then the base currency is at discount and…

Q: You have called your Forex dealer and asked for quotations USD/EUR on the spot, 1 month, 3-month and…

A: A forward contract is a type of flexible derivative contract in which two parties agree to buy or…

Q: Suppose you have a 1,200,000 US dollar payable coming due in June and that the spottoday is .98…

A: Hedging: Multinational companies with receivables and payables in several currencies seek to hedge…

Q: UCD (U.S. based MNC) will receive 250,000 euros in one year. The spot exchange rate today is $1.20…

A: Currently in the forward market, the forward rate exhibits a 5% discount from current exchange rate.…

Q: Assume that the 3 months JPY Libor (market interest rate) is 0.25% p.a., the 3 months USD Libor is…

A: Interest rate parity = Spot rate * (1+Rate of interest of quoting currency / 1+Rate of interest of…

Q: Let the U.S. dollar-yen spot rate be ¥120/$. Also, let the 180-day forward exchange rate be…

A: Calculation- Forward discount = [[forward exchange rate - spot exchange rate)/ spot exchange…

Q: ou have the following information: the current exchange rate is SGD 0.40/ MYR. Meanwhile, the SGD…

A: Arbitrage profit is generated by purchasing and selling a same securities or portfolio at varying…

Q: The Indian rupee (INR) is currently trading at INR 50 = US$1. With 90-day Indian-rupee and U.S.…

A: Spot rate of Indian rupee is INR 50 = $1 90-day INR yield is 10% per annum. USD treasury bill rate…

Q: In the spot market, P1 = 100 USD, 1 USD = 0.95 Yen, and 1 Yen = 5.50 British Pound. What is the…

A: The cross rate functions can be used to calculate the exchange rate of Peso and Pound

Q: You are given that the annual Australian dollar interest rate is 1% and the United States annual…

A: The forward rate premium is the difference between the expected and the spot exchange rate. It…

Q: Suppose the spot exchange rate for the Hungarian Forint is HUF 209/USD. The infiation rate in the US…

A: The following information has been provided in the question: Spot exchange rate for Hungarian…

Q: A currency trader observes the following quotes in the spot market:   1 U.S. dollar = 1.21…

A: Given, 1 U.S. dollar =1.21 Japanese yen 1 British pound=2.25 Swiss francs 1 British pound=1.65 U.S.…

Q: Assume that the current price of a Big Mac in the United States today is $5.75.  Assume also that…

A: Big Mac in the United States = $5.75 Big Mac in Peru =10.50 sol USDPEN exchange rate = 3.7400 sol…

Q: What is the two-way price for CHF/SGD? On which side of this price would the customer sell SGD? What…

A: Information Provided: Current spot rates: USD/CHF = 1.5384/89 USD/SGD = 2.3895/05 EUR/USD =…

Q: Suppose the current exchange rate is $1.77/E, the interest rate in the United States is 5.08%, the…

A: Here, To Find: Part a. Forward Exchange rate =? Part b. d1 and N1 =? Part c. d2 and N2 =? Part d.…

Q: The Swiss Franc is trading at 1.1106 $/SFr, the euro is trading at 1.1268 $/euro. If you can buy or…

A: Arbitrary profit is the excess amount earned by using the mis-pricing in the market.

Q: Suppose the US yield curve is flat at 5% and the euro yield curve is flat at 4%. The current…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Is there any violation of CIP? (b) Calculate the covered margin (going short on the AUD). (c)…

A: Here the spot rate is lower than the forward rate, so the EUR is selling at a premium.  The interest…

Q: EURUSD is trading at 1.0850, US 3 month interest rates are 1.25% whilst Euro 3 month rates are…

A: Given: Interest Rate of Euro = 2.25% Interest Rate of USD = 1.25% Spot Rate = Euro/USD = 1.0850…

Q: Suppose that the EUR/USD spot exchange rate is EeUr'USD =0.95 and that a 12-month for contract is…

A: The rates may go up and down depending on the interest rate and there may be appreciation or…

Q: The current spot rate of the US $ against the UK £ is $1.310 to £1. Inflation rates for the next…

A: Purchasing power perity is given by F/S = (1+ia)/(1+ib) Where,  ia = inflation in price currency's…

Q: Market conditions are as follows; Exchange rate is USD 1 = JPY 130.00. USD market interest rate is…

A: The capital budgeting is a technique that helps to analyze the profitability of the project and…

Q: A currency trader observes that in the spot exchange market, 1 U.S.dollar can be exchanged for 3.58…

A: The requirement is to calculate the cross exchange rate between the two currencies. To calculate the…

Q: A currency trader observes that in the spot exchange market, 1 U.S. dollar can be exchanged for 3.5…

A: You have to find out cross rates between two currencies.

Q: If spot rate is USD2.5968/OMR and interest rate for USD is 29% per annum. One-year forward exchange…

A: Spot Rate = 2.5968/OMR Interest Rate for USD = 2% per annum Forward Rate = 2.6008/OMR Interest 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 U.S. yield curve is flat at 5% and the euro yield curve is flat at 3%. The current…

A: We have, U.S. yield Curve = 5% Euro Yield Curve = 3% Exchange Rate = $1.25 per Euro Amount of Swap…

Q: Assume that the indirect quote is for 115 Japanese yen per U.S.dollar and that the direct quote is…

A: Computation of Exchange rate of 1Euro is equal to how many yen: The exchange rate is given: 1US$=115…

Q: The nominal yield on 6-month T-bills is 8%, while default-free Japanese bonds that mature in 6…

A: Interest rate parity is a theory which states that there exist a relationship between spot exchange…

Q: The current spot exchange rate is $1.22/€ and the three-month forward rate is $1.30/€. You enter…

A: Three month forward rate = $1.30/€ Spot exchange rate at maturity = $1.50/€

Q: Suppose the risk free rate in pounds is 5.12% and the risk free rate in US dollars is 7.71%. The…

A: The no-arbitrage exchange rate will be computed by using the current exchange rate, the risk-free…

Q: Suppose the U.S. yield curve is flat at 5% and the euro yield curve is flat at 3%. The current…

A: calculation of the exchange rate  1st year swap rate = (1.25*1.05)/1.03 = $1.2743 per euro 2nd year…

Q: Suppose you have the following spot exchange rates:   USD/AUD 0.5300 AUD/EUR 1.6428 USD/EUR…

A: Triangular Arbitrage is a trading strategy in which profit is earned from the price differential of…

Q: The current spot exchange rate is AUD 1.00 = USD 0.80. The Australian risk‐free rate is 3.0%  p.a.…

A: We have use interest rate parity theorem to get it.

Q: The graph below shows contingency net profits for a buyer of a Swiss franc (CHI straddle, in which…

A: Call premium is $0.03 Put Premium is $0.04 Exercise Price is $1.09 per CHF Strategy used is Straddle…

Q: Assume that the British pound is selling in the United States at $1.5985 spot and $1.5939 in the…

A: An exchange rate is said to be trading at premium in future if forward price is greater than spot…

Q: The current spot rate is $0.80/A$ and the six-month forward rate is $0.7775/A$. One-year interest is…

A: Here, Current Spot Rate is  $0.80/A$ Six-month forward rate is $0.7775/A$ One year interest rate in…

Q: If the interest rate in Oman is 10% and in China is 15%. Current spot exchange rate is CNY16.59/OMR…

A: Covered interest arbitrage is the method used by the investor that uses the different favourable…

Q: The current spot exchange rate is AUD 1.4925 = USD1. The Australian risk-free rate is 1.5% p.a.…

A: Spot exchange rate 1$ = AUD 1.4925 Australian risk free rate = 1.5% p.a US risk free rate = 2.2%

Q: The table below shows the -day forward rate on the Ghana cedi per Pound Sterling. Currency Spot…

A: An exchange rate is the rate at which the currency of home country can be exchange with the single…