The SF/$ spot exchange rate is SF1.26/$ and the 180-day forward exchange rate is SF1.32/$.
What is the forward premium or discount?
If you are a Switzerland based exporter expecting $500,000 dollar receivables in 6 months,
would you hedge your dollar receivables using a forward contract?
How?
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The SF/$ spot exchange rate is SF1.26/$ and the 180-day forward exchange rate is SF1.32/$. What...
The Wall Street Journal reported the following spot and forward rates for the Swiss franc ($/SF). Spot $ 0.8215 30-day forward $ 0.8530 90-day forward $ 0.8553 180-day forward $ 0.8600 a. Was the Swiss franc selling at a discount or premium in the forward market? Discount Premium b. What was the 30-day forward premium (or discount) percentage? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) c. What was the 90-day forward...
Spot $ 0.8221 30-day forward $ 0.8542 90-day forward $ 0.8559 180-day forward $ 0.8606 What was the 30-day forward premium (or discount) percentage? What was the 90-day forward premium (or discount) percentage? Suppose you executed a 90-day forward contract to exchange 290,000 Swiss francs into U.S. dollars. How many dollars would you get 90 days hence? so for the first question I got 0.544, this was obviously wrong and I know it wont allow me to answer the remaining...
180-day U.S. interest rate 180-day Fijian interest rate 180-day forward rate of Fijian dollar (F$) Spot rate of Fijian dollar Expected spot rate of Fijian dollar in 90 days 49% 596 $0.49 $0.48 $0.47 Assume that Monte Christo Corporation in the U.S. will receive 500,000 Fijian dollars in 180 days. What is value of the receivable if Monte Christo implements a forward hedge? a. $240,000 b. $245,000 c. $235,000 d. None of these choices are correct.
Calculate the future dollar cost of meeting this SF obligation if you decide to hedge using money market. You plan to visit Geneva, Switzerland in three months to attend an international business conference. You expect to incur the total cost of SF 5,000 for lodging, meals and transportation during your stay. As of today, the spot exchange rate is $0.60/SF and the three-month forward rate is $0.63/SF. You can buy the three-month call option on SF with the exercise rate...
To practice for the hedging alternatives: You plan to visit Geneva, Switzerland in three months to attend an international business conference. You expect to incur the total cost of SF 5,000 for lodging, meals and transportation during your stay. As of today, the spot exchange rate is $0.60/SF and the three-month forward rate is $0.63/SF. You can buy the three-month call option on SF with the exercise rate of $0.64/SF for the premium of $0.05 per SF. Assume that your...
current spot exchange rate: $0.0100/yen current 180-day forward exchange rate: $0.0105/yen 180-day U.S. interest rate(on dollar denominated assets): 6.05% 180-day Japanese interest rate(on yen denominated assets): 1.00%
QUESTION 25 Let the U.S. dollar-yen spot rate be ¥120/$. Also, let the 180-day forward exchange rate be ¥124.8/$. Then the yen is selling at a per annum _________ of ___________. a. premium; 8.00% b. premium; 6.30% c. discount; 8.00% d. discount; 1.57% QUESTION 26 Assume that a green card holder flies with American Airlines from NYC to Paris. The related transactions will be reported on the Balance of Payments. True False
1. Assume the following information: 180-day U.S. interest rate 180-day British interest rate 180 day forward rate of British pound Spot rate of British pound 8% 9% $1.50 $1.48 Assume that a US firm will receive 400,000 pounds in 180 days. Would it be better off using a forward hedee or a money market hedge? Substantiate your answer with estimated revenues for each tune hedge. h. Assume that a US firm will pay 400,000 pounds in 180 days. Would it...
If the spot rate of the British pound is $2.2, and the 180-day forward rate is $2.25, what is the annualized premium or discount? (1pt) 3.
Assume the following information: Spot rate of Mexican peso : $.100 180-day forward rate of Mexican peso : $.098 180-day Mexican interest rate : 6% 180-day U.S. interest rate : 5% a) What would be the return to a Mexican investor who has 1,000,000 Mexican pesos from using covered interest arbitrage? (i.e. the Mexican investor will convert the peso into U.S. dollar at the spot rate and invest it in the U.S. for 180 days, and simultaneously sell a U.S....