Use what you need of the following set of information to answer the question:
S0 = $1.1420/€ S0 = £0.7776/$ S0 = $1.2860/£
E (S1 (3-months)) = $1.1280/€ F3-months = $1.1590/€
Where: € = euro; £ = British pound; E ( ) = Expected.
(Show all your calculations and explain your work. All currency amount answers should be presented with two decimal places, all currency rates with the same number of decimals they are given, and all rates of change and premiums/discounts with four decimal places)
The relevant two rates are: |
S0 = £0.7776/$ and S0 = $1.2860/£ |
The first one is direct quote for $ and the second one |
is an indirect quote for $. |
If the two rates are consistent with each other the |
reciprocal of one should equal the other. |
The reciprocal of the second quote = 1/1.2860 = 0.7776 |
As the reciprocal of the second is equal to the first |
quote, the rates are consistent with one another. |
Use what you need of the following set of information to answer the question: S0 =...
Use what you need of the following set of information to answer the question S0 = $1.1420/€ S0 = £0.7776/$ S0 = $1.2860/£ E (S1 (3-months)) = $1.1280/€ F3-months = $1.1590/€ Where: € = euro; £ = British pound; E ( ) = Expected. Is the $1.2860/£ price given above a direct quote or indirect quote from the perspective of a British citizen? Is the $1.1420/€ price given above a direct quote or indirect quote from the...
Use what you need of the following set of information to answer the question: S0 = $1.1420/€ S0 = £0.7776/$ S0 = $1.2860/£ E (S1 (3-months)) = $1.1280/€ F3-months = $1.1590/€ Where: € = euro; £ = British pound; E ( ) = Expected. 1. Is the $1.2860/£ price given above a direct quote or indirect quote from the perspective of a British citizen? 2. Is the $1.1420/€ price given above a direct quote or indirect quote...
Use what you need of the following set of information to answer the question: S0 = $1.1420/€ S0 = £0.7776/$ S0 = $1.2860/£ E (S1 (3-months)) = $1.1280/€ F3-months = $1.1590/€ Where: € = euro; £ = British pound; E ( ) = Expected. Do you think there is anything off or not right about the three-month forward rate given above for the euro? If yes, what is off or wrong with it? (Show all your calculations...
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PLEASE HELP! WILL GIVE GREAT REVIEW! Use what you need of the following set of information to answer the question: S0 = $1.1420/€ S0 = £0.7776/$ S0 = $1.2860/£ E (S1 (3-months)) = $1.1280/€ F3-months = $1.1590/€ Where: € = euro; £ = British pound; E ( ) = Expected. If a currency dealer wants to use the above three-month forward rate to quote the three-month dollar as a percent premium or discount what rate would she...