Foundations Of Finance
10th Edition
ISBN: 9780134897264
Author: KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher: Pearson,
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Chapter 16, Problem 4SP
Summary Introduction
To compute: Indirect quote for spot and forward of yen, Country S franc and Country C dollar contracts.
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Country 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.
Cross rates:
a) Indirect dollar quotes for yen and pound are 100.2468-3579 and 1.3579-654, respectively. What is the indirect yen for pound cross rate?
b) Direct euro quotes for pound and Swiss franc are 1.2468-579 and 0.9876-13. What is the direct franc for pound cross rate?
c) Dollar is priced at 100.2468-3579 in Tokyo. Pound is priced at 1.1111-357 in New York. What is the direct yen for pound cross rate?
d) Euro is priced at 64.5982-7829 in Moscow. Pound is priced at 1.2468-579 in Frankfurt. What direct pound for ruble cross rate?
May I get part C and D
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…
Chapter 16 Solutions
Foundations Of Finance
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - What is meant by arbitrage profits?Ch. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 1SP
Ch. 16 - Prob. 2SPCh. 16 - Prob. 3SPCh. 16 - Prob. 4SPCh. 16 - (Exchange rate arbitrage) You own 10,000. The...Ch. 16 - Prob. 6SPCh. 16 - Prob. 7SPCh. 16 - Prob. 8SPCh. 16 - Prob. 9SPCh. 16 - Prob. 10SPCh. 16 - Prob. 11SPCh. 16 - (Purchasing-power parity) Lets assume a McDonalds...Ch. 16 - Prob. 1MCCh. 16 - Prob. 2MCCh. 16 - Prob. 3MCCh. 16 - d. What are the differences among a forward...Ch. 16 - Prob. 5MCCh. 16 - Prob. 6MCCh. 16 - Selling Quotes for Foreign Currencies in New York...Ch. 16 - Prob. 8MCCh. 16 - Prob. 9MC
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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 $0.03118/LC What was the approximate discount or premium on a three-month forward for LC? A. 0.643% premium B. 0.013% premium C. 0.013% discount D. 0.643% discountarrow_forwardGiven below are a set of foreign exchange quotes for several currencies against the Australiandollar as of August 5, 2020.Australian Dollar Exchange RatesCurrency Sell/buyUS, dollar 0.7143/0.7143UK, pound 0.5458/0.5459China, yuan Renminbi 4.9872/4.9907Hong Kong, dollar 5.5349/5.5364India, rupee 53.572/53.669Japan, yen 75.70/75.70Malaysia, ringgit 3.0104/3.0139Philippines, peso 34.953/35.135South Africa, rand 12.2272/12. 2340Switzerland, franc 0.6551/0.6551Thailand, baht 22.1892/22.2317(a) A friend of yours is totally confused by these rates. She is planning to visit Thailand next monthand wishes to purchase 10,000,000 Baht. How many Australian dollars does she require,assuming she is able to use the above quotes?(b) What are the direct quotes for the following currencies with respect to the Australian dollar?(i) UK pound(ii) Chinese Renminbi(iii) Indian rupee(iv) Malaysian ringgit(v) South African rand(c) Create a table showing the bid and ask quotes of each of the following currency…arrow_forwardThese are currency quotes found on a foreign market: GH 4.30/$, and GH 4.55/$. Which currency is appreciating in value?arrow_forward
- A quotation with the value of a foreign currency in dollars is referred to as a ____ quotation; a quotation with the foreign currency per dollar is referred to as a ____ quotation. A. direct; direct B. indirect; direct C. indirect; indirect D. direct; indirectarrow_forwardWhen translating Acceletron’s fi nancial statements into US dollars, Redline is least likelyto use an exchange rate of USD per SGD:A . 0.671.B . 0.588.C . 0.654.arrow_forwardassume the direct quote on the euro is 2.14 and the indirect quote on the Swiss franc is 0.76. what is the cross-rate for euro's in terms of Swiss francs?arrow_forward
- Assume that the British pound is selling in the United States at $1.5985 spot and $1.5939 in the 180-day forward market, and that the Canadian dollar is selling in the United States at $.7336 spot and $.7422 in the 180-day forward market. Both quotes are direct. Which of the following is correct? Show your calculations. the Canadian dollar is selling at 2.3 percent premium in the forward market the Canadian dollar is selling at 1.17 percent premium in the forward market the Canadian dollar is selling at 1.17 percent discount in the forward market the British pound is selling at .57 percent premium in the forward marketarrow_forwardTriangular arbitrage: Price of a US dollar in Geneva is 1.0204-1030. Price of a US dollar in Japan is 99.8877-9876. Indirect Swiss franc for yen quote is 100.2468-3579. What is percentage return from triangular arbitrage?arrow_forwardAt what rates should the following balance sheet accounts in foreign statements be translated (using the current rate method) into U.S. dollars?arrow_forward
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