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?
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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?
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- The nominal yield on 6-month T-bills is 7%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 5.5%. In the spot exchange market, 1 yen equals $0,009. If interest rate parity holds, what is the 6-month forward exchange rate?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 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 $0.03118/LC What was the approximate discount or premium on a three-month forward for LC? A. 0.643% premium B. 0.013% premium C. 0.013% discount D. 0.643% discount
- If spot rate is USD 2.5968/OMR and interst rate for OMR is 5% per annum . One year forward exchange rate is USD 2.5960/OMR . If interst rate parity holds and USD is home currency then calculate the interst for USD? 4.9675% 5.0323% 0.050323% 0.049676%The current (spot) exchange rate is 1.2 dollars per euro, the 6-month forward exchange rate is 1.195 dollars per euro, the 6-month dollar interest rate is 1% per annum (continuous). The (no-arbitrage) 6-month euro interest rate (per annum continuous) is (a) 0.018% (b) 1.004% (c) 1.139% (d) 1.418% (e) 1.835%The following are the spot and the swap forward rates of the AUD/USD Spot 1.2500–1.2550 One-month 40–20 This means that the US dollar is selling at a forward discount. the US dollar is selling at a forward premium. the Australian dollar is selling at a forward discount. after allowing for transaction costs, both currencies sell at par.
- The table below shows the -day forward rate on the Ghana cedi per Pound Sterling. Currency Spot Rate 1 month 3 month Ghana cedi 7.7840 7.9330 7.9218 Note: The exchange rate quote in the above table is a direct quote for Ghana cedi. i) Is the Pound Sterling at a forward discount or premium on the Ghana cedi? Justify ii) Suppose that you expect to receive 150,000 cedis in three months, determine how many pound sterling this is likely to be worth?The spot exchange rate between the Swiss franc (CHF) and the US dollar (USD) is currently 0.9786 CHF/USD. Six-month interest rates are 2% per annum in the United States and -0.5% (yes, negative) per annum in Switzerland. What is the implied forward rate in CHF/USD?Currently, the spot exchange rate is CHF 0.89/$ and the three-month forward exchange rate is CHF 0.86/$. The three-month interest rate is 5.6% per annum in the U.S. and 4.0% per annum in Switzerland. Assume that you can borrow as much as $1,120,000 or CHF 1,000,000. A. Determine whether the interest rate parity is currently holding. B. If the IRP is not holding, how would you carry out covered interest arbitrage? Show all the steps and determine the arbitrage profit. C. Explain how the IRP will be restored as a result of covered arbitrage activities.
- Currently, the GBP/USD rate is 1.5011 and the six-month forward exchange rate is 1.5261. The six-month interest rate is 7.6% per annum in the U.S. and 5.7% per annum in the U.K. Assume that you can borrow £1,000,000 or its equivalent in USD. How much do you make/lose if you borrow the foreign currency and invest locally? (USD, no cents)A newspaper provides spot exchange rate of $1 = £.7555 and 1-year forward rate of $1=£.7755. You’ll also need to use the additional information provided in the problems. Jay has Euro 1,000 wishes to trade out of euro and into Pound. The USD-Euro exchange rate is quoted as $1.30 = Euro1.00. How much Pound will the customer get, 2 decimal places?
