with a spot rate of $1.2832/£ and a 3-month forward rate of $1.2873/£, is the pound...
Homework Answers
Answer : The answer is "Appreciate".
In case of spot rate
1 pound = $1.2832
After 90 days or 3 months
1 pound = $1.2873
Here we can see that before 90 days by spending $1.2832 we gets 1 pound. But after 90 days to get 1 pound we have to pay $1.2873 which is higher than before. This means that the value of pound has increased by $0.0041. Therefore, here over next 90 days we can expect that the pound is to appreciate.
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with a spot rate of $1.2832/£ and a 3-month forward rate of
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(a)
Covert the above exchange rates into the direct quotes.
(b)
Does the forward rate structure imply that the Canadian dollar
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next
year?
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three months, over the next six months, and over the next
year?...
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