On April 10, the annualized six-month Aussie dollar rate in the Sydney market was 2.98％, the annualized six-month US dollar rate in the New York market was 0.32％, the spot exchange rate was $1=A$1.0689～1.0699, the six-month forward premium was 40~ 50, and a US bank

Q: Suppose 6 months ago a Swiss investor bought a 6-month U.S. Treasury bill at a price of $9,708.74,…

A: Given: T bill price = $9,708.74 Maturity value = $10,000 Exchange rate = 1.4200 Swiss francs Forward…

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: A year ago, the pound was trading at 515 Nigerian nairas (NGN) per pound and 93 Indian rupees (INR)…

A: To calculate exchange rate between 2 currencies when the exchange of of each currency with a common…

Q: In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates…

A: Part b.1) Calculation of spot exchange rate is in 90days: Answer: Forward exchange rate in 90 days…

Q: Cal Bank believes the US Dollar will appreciate over the next five days from GHS 4.48 to GHS 4.50.…

A: Given Information Forecast of Bank: US Dollar appreciates over next five days from  GHS 4.48 to GHS…

Q: On May 1, 2XX3, a bundle of goods in China costs 5,000,000 yuan, while the same goods cost $60,000…

A: In this we have to consider purchase power parity principal to calculate the future exchange rate.

Q: In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates:…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: The current exchange rate is 1.1 dollars per euro. A 5-year U.S.government bond has a 3% yield, and…

A:

Q: change in the Mexican peso is 1% during the next quarter, the maximum one-quarter loss is about 65…

A: There are change in the exchange rate due to which there high fluctuations in value of goods and…

Q: Suppose that the annual interest rates on 6-months borrowing in Romania and the United States are…

A: Interest rate parity - It states that interest rates across the globe should be the same i.e.…

Q: In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates…

A: Part b.1) Calculation of spot exchange rate is in 90 days: Answer: Forward exchange rate in 90 days…

Q: A US based IT firm required GBP 100000 in 180 days. The company feels that exchange rates are…

A: 1. Forward contract =                                                                          =…

Q: Six-month T-bills have a nominal rate of 7%, while default-free Japanese bonds that mature in 6…

A: Interest rate parity refers to the theory which tells us that the interest rate differences or…

Q: The nominal yield on 6-month T-bills is 7%, while default-free Japanesebonds that mature in 6 months…

A: Formulas:

Q: On April 1, A.C. Corporation a calendar-year U.S. electronics manufacturer, buys 830000 Yen worth of…

A: Interest for 3 months = Amount payable x interest rate x 3/12 = (830000 x 90%) x 8% x 3/12 = 14940…

Q: 1.What would the spot exchange rate (Yen/$) be in 90 days?  2. Would Ari make a profit by borrowing…

A:

Q: Suppose that today the exchange rate between the U.S. dollar and the Chinese yuan is $1  = .12 yuan.…

A: Here, Today's exchange rate: $1 = 0.12 yuan Next week's exchange rate: $1 = 0.20 yuan To Find: Yuan…

Q: A US based IT firm required GBP 100000 in 180 days. The company feels that exchange rates are…

A: Hedge is defined as the financial term, which used to protect the investments or finances from the…

Q: Assume that the four-year annualized interest rate in the United States is 9 percent and the…

A: According to interest rate parity theorem the currency with higher interest rate will sell in…

Q: An exchange rate is 0.7000 and the six‐month domestic and foreign risk‐free interest rates are  5%…

A: The interest rate parity equation represents the relationship between the exchange rate of two…

Q: n a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates…

A: a)

Q: MSN Bank expects that the New Zealand dollar (NZD) will depreciate against the U.S. dollar (USD)…

A: Spot Rate NZD/USD = 0.44 Rate after 90days NZD/USD = 0.41 The amount borrowed from New Zealand…

Q: b) In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market…

A: Answer 1: Current spot rate = Yan 106 per dollar  U.S. dollars interest rate for 90 days = 10%…

Q: In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates…

A: According to interest rate parity theorem, interest rate differentials between two currencies…

Q: The spot exchange rate is $0.19 per Brazilian real in American terms. Assume interest rates are…

A: Arbitrage profit In finance, arbitrage profit is a profit earned by taking advantage of a difference…

Q: Given the following information: Exchange rate - Canadian dollar 0.665 per DM (spot) 1 Canadian…

A: Arbitrage is a strategy that uses the difference in the price of the same commodity in different…

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: n a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates:…

A: The question is based on the concept of net gain/loss due to investment in different currencies, due…

Q: n a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates…

A: Interest rate parity theorem can be used to compute the expected exchange rates in the future.…

Q: In a daily meeting, the Chief Financial Officer (CFO) gave Ari the following table of market rates…

A: Computation of the spot exchange rate in 90 days as follows: Hence, the spot exchange rate in 90…

Q: MSN Bank expects that the New Zealand dollar (NZD) will depreciate against the U.S. dollar (USD)…

A: Spot Rate USD per NZD  = 0.44 Spot Rate USD per NZD after 90 days =0.41 Borrowing Rate in NZD…

Q: er this morning, the annual U.S. interest rate was 6 percent and Mexico’s annual interest rate was 8…

A: In this we can use interest rate parity concept to calculate the forward rate.

Q: Assume that Stevens Point Co. has net receivables of 100,000 Singapore dollars in 90 days. The spot…

A: Money market hedge is using money market to hedge the risk of change in foreign currency…

Q: n a particular year, the spot exchange rate between the Canadian dollar and U.S. dollar was $0.7554…

A: The interest rate differential disparity refers to the mismatch between the interest rate…

Q: If the current exchange rate is $1.95/£, the 1-year forward exchange rate is $2.05/£, and the…

A: Current exchange rate=1.95Forward exchange rate=2.05Interest rate on british government bills=7%

Q: Suppose that last year, the 12-month interest rates for the Australia and the Greece are 2.4% and…

A: The forward exchange rate is used to find out the exchange rate between two currencies in the future…

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…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.