Homework Answers
When the forward rate of a currency is higher than it's spot rate, the currency is said to be selling at 'forward premium'. Conversely if the the forward rate of a currency is lower than it's spot rate, the currency is said to be selling at 'forward discount'.
In the given question, only third option fulfills the criteria where U.S. dollar forward rate is lower than the spot rate (one dollar can buy 120 JPY per spot vs only 110 JPY per forward). Hence third option is correct.
In first and second options, forward rate is not given and therefore incorrect. In the fourth option, the forward rate is higher than spot rate & therefore incorrect.
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Question Completion Status: QUESTION 15 The U.S. dollar is selling at a forward discount when what...
QUESTION 15 Suppose the U.S. dollar-British pound exchange rate is quoted as USD2.00/GBP. This is a:...
QUESTION 15 Suppose the U.S. dollar-British pound exchange rate is quoted as USD2.00/GBP. This is a: direct quotation in Great Britain. o indirect quotation in United States. direct quotation in the United States. O direct quotation in Great Britain and an indirect quotation in the United States.
QUESTION 24 Suppose the U.S. dollar-British pound exchange rate is quoted as USD2.00/GBP. This is a:...
QUESTION 24 Suppose the U.S. dollar-British pound exchange rate is quoted as USD2.00/GBP. This is a: direct quotation in Great Britain. indirect quotation in United States. direct quotation in the United States. direct quotation in Great Britain and an indirect quotation in the United States,
Country USD Nominal Rate 2.5% GBP 3.5% The above table contains nominal interest rate information for the United States...
Country USD Nominal Rate 2.5% GBP 3.5% The above table contains nominal interest rate information for the United States and Great Britain. Assume the current U.S. dollar-British spot rate is GBP0.6134/USD. what is the approximate forward exchange rate for delivery 360 days from now? [Assume the USD is the home currency (currency of interest)] 0 GBP 0.6195/USD GBP 0.6073/USD USD 0.6195/GBP 0 USD0.6073/GBP
QUESTION 21 Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is V115...
QUESTION 21 Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is V115 $1. Rinaldo finds out that the rate quoted in New York at 10:00 a.m. (3:00 p.m. London time) is V135 = $1. Rinaldo decides to buy yen in New York and sell it in London. Rinaldo is engaging in currency swapping. currency speculation carry trade. arbitrage. 1 points Save Answer QUESTION 22 Assume you are an Israeli investor, the symbol for the Israeli currency,...
3. Trading in foreign exchange What are spot rates and forward rates? Suppose you open the...
3. Trading in foreign exchange What are spot rates and forward rates? Suppose you open the newspaper today and observe the following indirect exchange rate quotations for the British pound: Spot Exchange Rates Forward Exchange Rates 30 Days 60 Days 90 Days British pound (pound/dollar) 0.5298 0.5311 0.5335 0.5378 The British pound is selling at a in the forward market. Suppose you make a £450,000 sale to a British customer who has 60 days to pay you in cash. The...
3. Trading in foreign exchange What are spot rates and forward rates? Suppose you open the...
3. Trading in foreign exchange What are spot rates and forward rates? Suppose you open the newspaper today and observe the following indirect exchange rate quotations for the British pound: Spot Exchange Rates Forward Exchange Rates 30 Days 60 Days 90 Days British pound (pound/dollar) 0.5401 0.5423 0.5439 0.5445 1. The British pound is selling at a (discount/premium) in the forward market. 2.Suppose you make a £550,000 sale to a British customer who has 60 days to pay you in...
3. Trading in foreign exchange Aa Aa What are spot rates and forward rates? Suppose you...
3. Trading in foreign exchange Aa Aa What are spot rates and forward rates? Suppose you open the newspaper today and observe the following indirect exchange rate quotations for the British pound Forward Exchange Rates 60 DaysS 0.5299 Spot Exchange Rates 30 Days 90 Days British pound (pound dollar) 0.5267 0.5283 0.5315 The British pound is selling at a in the forward market. Suppose you make a E 600,000 sale to a British customer who has 60 days to pay...
QUESTION 18 The USD/CAD spot rate is USD 0.7500 - USD 0.7505. The 6-month forward points...
QUESTION 18 The USD/CAD spot rate is USD 0.7500 - USD 0.7505. The 6-month forward points are 10-20. What is the outright 6-month forward quotation? 0 USD 0.7510 - USD 0.7520 0 USD 0.7490 - USD 0.7485 0 USD 0.7510 - USD 0.7525 None of the answers is correct. QUESTION 19 Assume you are a French investor. You see that stock for British Airways has a bid price of EUR 36 and an ask price of EUR 36.5 on the...
Assume the current U.S. Dollar-British spot rate is $1.4300/£. If the current nominal one-year interest rate...
Assume the current U.S. Dollar-British spot rate is $1.4300/£. If the current nominal one-year interest rate in the U.S. is 5% and the comparable rate in Britain is 6%, what is the approximate forward exchange rate for 360 days?
Assume the current U.S. dollar-British spot rate is $1.3063=£. If the current nominal one-year interest rate...
Assume the current U.S. dollar-British spot rate is $1.3063=£. If the current nominal one-year interest rate in the U.S. is 1.5% and the comparable rate in Britain is 0.75%, what is the approximate forward exchange rate for 360 days? A. £1.2965/$ B. £0.7598/$ C. $1.2965/£ D. £1.3161/$
QUESTION 15 Suppose the U.S. dollar-British pound exchange rate is quoted as USD2.00/GBP. This is a: direct quotation in Great Britain. o indirect quotation in United States. direct quotation in the United States. O direct quotation in Great Britain and an indirect quotation in the United States.
QUESTION 24 Suppose the U.S. dollar-British pound exchange rate is quoted as USD2.00/GBP. This is a: direct quotation in Great Britain. indirect quotation in United States. direct quotation in the United States. direct quotation in Great Britain and an indirect quotation in the United States,
Country USD Nominal Rate 2.5% GBP 3.5% The above table contains nominal interest rate information for the United States and Great Britain. Assume the current U.S. dollar-British spot rate is GBP0.6134/USD. what is the approximate forward exchange rate for delivery 360 days from now? [Assume the USD is the home currency (currency of interest)] 0 GBP 0.6195/USD GBP 0.6073/USD USD 0.6195/GBP 0 USD0.6073/GBP
QUESTION 21 Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is V115 $1. Rinaldo finds out that the rate quoted in New York at 10:00 a.m. (3:00 p.m. London time) is V135 = $1. Rinaldo decides to buy yen in New York and sell it in London. Rinaldo is engaging in currency swapping. currency speculation carry trade. arbitrage. 1 points Save Answer QUESTION 22 Assume you are an Israeli investor, the symbol for the Israeli currency,...
3. Trading in foreign exchange Aa Aa What are spot rates and forward rates? Suppose you open the newspaper today and observe the following indirect exchange rate quotations for the British pound Forward Exchange Rates 60 DaysS 0.5299 Spot Exchange Rates 30 Days 90 Days British pound (pound dollar) 0.5267 0.5283 0.5315 The British pound is selling at a in the forward market. Suppose you make a E 600,000 sale to a British customer who has 60 days to pay...
QUESTION 18 The USD/CAD spot rate is USD 0.7500 - USD 0.7505. The 6-month forward points are 10-20. What is the outright 6-month forward quotation? 0 USD 0.7510 - USD 0.7520 0 USD 0.7490 - USD 0.7485 0 USD 0.7510 - USD 0.7525 None of the answers is correct. QUESTION 19 Assume you are a French investor. You see that stock for British Airways has a bid price of EUR 36 and an ask price of EUR 36.5 on the...
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