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The following tables contain information on Swiss Franc/Singapore dollar exchange rate and their interest rates: Currency Spot 1 Month 3 Months 6 Months 12 Months CHF/SGD 6.6575/625 73/86 263/296 505/590 1194/1351 Currency 1 Month 3 Months 6 Months 12 Months SGD 5.6785-5.8125 5.5000-5.6250 5.5000-5.6250 5.6250-5.7500 CHF 7.1250-7.2500 7.1875-7.3125 7.1875-7.3125 7.2500-7.3750 Consider the 12-month premium/discount and the relevant interest rates. Is there way to make arbitrage profits? If yes, explain the strategy. Assume you have CHF 10m to work with.
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- 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% discountCountry Contract $/Foreign CurrencyCanada – Dollar Spot 0.843730-day 0.841790-day 0.8395Japan – Yen Spot 0.00468430-day 0.00471790-day 0.004781Switzerland - Franc Spot 0.513930-day 0.516990-day 0.5315 d. (Cross rates) Compute the Canadian dollar/yen and the yen/Swiss franc spot rates from the data in the preceding table.Table 2 gives the exchange rate quotations for the U.S. dollar and the British pound. Table 2. Foreign Exchange Quotations Britain (Pound) 30-day Forward 60-day Forward 180-day Forward U.S. Dollar Equivalent Tuesday 1.3448 1.3392 1.3278 1.3128 Monday 1.3561 1.3507 1.3401 1.3260 Currency Per U.S. Dollar Tuesday Monday 0.7436 0.7374 0.7467 0.7404 0.7531 0.7462 0.7617 0.7541 (a) If you were to buy pounds for immediate delivery, what is the dollar cost of each pound on Tuesday? (b) If you were to sell dollars for immediate delivery, what is the pound cost of each dollar on Tuesday? (c) Regarding the Tuesday quotations: compared to the cost of buying 100 pounds on the spot market, if 100 pounds were bought for future delivery in 180 days the dollar cost of the pounds would be how much higher or lower (if lower, enter as a negative number)?
- Consider the following table, which reports the spot exchange rate between the dollar and the pound, as well as the interest rates in the UK and the US (standard notation applies): 5 S/£ exchange rate r UK (%)r US (%) spot S1.1122/£1 1 month 2.1 2.1 3 month 2.5 2.9 6 month 2.9 4 1 year 4.1 4.5 Showing all your calculations, evaluate the 1 - month, 1-year, 3- month, and 6-month forward exchange rate between the pound and the dollar.Here are some quotes of the Burundi Franc/U.S. Dollar spot exchange rate given at once via internet by four banks:Bank Yellow: 1,945.8871-1947.2134Bank Purple: 1,945.8921-1947.5021Bank Blue: 1,947.3112-1948.9978Bank Pink: 1,947.1981-1948.8697 Are these quotes logical?TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 --- Exchange Rate Table for Month 2 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 --- An American family goes on vacation…
- TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 --- Exchange Rate Table for Month 2 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 --- An American company contracts a…TIPS FOR READING AN EXCHANGE RATE CHART: Read down the chart. For example, in column 1 it says the US Dollar is equal to each of the currencies below it. Therefore $1 = .76 £ or $1 = .89 €. Exchange Rate Table for Month 1 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.32 .16 .0088 1.13 British Pound .76 --- .12 .0067 .85 Chinese Yuan 6.37 8.46 --- .056 7.21 Japanese Yen 113.04 149.55 17.75 --- 127.55 Euro .89 1.17 .14 .0078 --- Exchange Rate Table for Month 2 US Dollar $1 = British Pound 1 £ = Chinese Yuan 1 Y = Japanese Yen 1 ¥ = Euro 1€ US Dollar --- 1.40 .20 .0080 1.17 British Pound .70 --- .11 .0065 .89 Chinese Yuan 6.20 8.72 --- .062 7.59 Japanese Yen 116.24 146.89 16.32 --- 117.2 Euro .92 1.11 .15 .0078 --- A currency depreciates (or gets…Based on the table below, which currencies appreciated between January and March? Name of Currency Exchange Rate JANUARY $1 = Exchange Rate MARCH $1 = Polish Zloty 4.5 4.08 Mozambique Meticals 62.5 66.00 Albanian Lek 109.08 111.60 Australian Dollar 1.85 1.67 a. Mozambique Metical b. Polish Zloty c. Albanian Lek d. Australian Dollar
- Given below are a set of foreign exchange quotes for several currencies against the Australiandollar as of August 5, 2020.Australian Dollar Exchange RatesCurrency Sell/buyUS, dollar 0.7143/0.7143UK, pound 0.5458/0.5459China, yuan Renminbi 4.9872/4.9907Hong Kong, dollar 5.5349/5.5364India, rupee 53.572/53.669Japan, yen 75.70/75.70Malaysia, ringgit 3.0104/3.0139Philippines, peso 34.953/35.135South Africa, rand 12.2272/12. 2340Switzerland, franc 0.6551/0.6551Thailand, baht 22.1892/22.2317(a) A friend of yours is totally confused by these rates. She is planning to visit Thailand next monthand wishes to purchase 10,000,000 Baht. How many Australian dollars does she require,assuming she is able to use the above quotes?(b) What are the direct quotes for the following currencies with respect to the Australian dollar?(i) UK pound(ii) Chinese Renminbi(iii) Indian rupee(iv) Malaysian ringgit(v) South African rand(c) Create a table showing the bid and ask quotes of each of the following currency…Using the USD exchange rate, approximately how many Canadian dollars can you buy for 2500 Swiss Francs? Currency Exchange Rates USD $ Euro € Yen ¥Canadian Dollar 1.21 1.45 0.008Euro 0.81 1 0.00865Japanese Yen 104.5 115.6 1US Dollar 1 1.24 0.00957Swiss Franc 1.35 1.65 0.00120Below is the information regarding U.S. and Canadian annualized interest rates: Currency Lending Rate Borrowing Rate U.S Dollar ($) 6.73% 7.20% Euro (€) 6.80% 7.28% Note: Spot rate of Euro is $1.13 An international bank can borrow either 20 million U.S. dollars or 20 million euro. The bank expects the spot rate of the euro is $1.10 in 90 days, which is equal to ______ profit. A. $583,800 B. $588,200 C. $584,245 D. $579,845
