ZuoTi.Pro
Question

The spot quote for the Australian Dollar is $0.5794 bid and $0.5802 ask. The forward pips...

  1. The spot quote for the Australian Dollar is $0.5794 bid and $0.5802 ask. The forward pips for 12 months are

52/48. Calculate the forward bid/ask prices.

  1. You buy a 90-day forward contract for 850,000€. The forward rate is $1.107/€. In 90 days the spot rate is rate is $1.105/€. How much do you pay for the Euros in total?
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Forward bid price = spot bid price + forward points = $0.5794 + $0.0052 = $0.5846

Forward ask price = spot ask price + forward points = $0.5802 + $0.0048 = $0.5850

By buying a forward contract, the rate at which euros are bought is locked in. The locked-in rate is the forward rate. The spot rate in 90 days is not relevant.

Amount paid for euros = number of euros * forward rate

Amount paid for euros = €850,000 * $1.107 = $940,950

0 0
Add a comment
Know the answer?
Add Answer to:
The spot quote for the Australian Dollar is $0.5794 bid and $0.5802 ask. The forward pips...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Use the following spot and forward bid-ask rates for the Australian dollar/U.S. dollar exchange rate from...

    Use the following spot and forward bid-ask rates for the Australian dollar/U.S. dollar exchange rate from 2020. Calculate the annual forward premium on AUD for all maturities AUD/USD Spot: Bid=0.6709 and Ask= 0.6705 Bid Ask AUD/USD Spot 0.6709 0.6705 AUD/USD 1-Month Forward 3.267 3.893 AUD/USD 2-Month Forward 7.4 7.6 AUD/USD 3-Month Forward 9.969 11.731 AUD/USD 6-Month Forward 21.4 21.9 AUD/USD 1-Year Forward 41.3 42.3 AUD/USD 2-Year Forward 65.4 70.4

  • SPOT AND FORWARD RATES Arvin Australian Imports has agreed to purchase 10,000 cases of Australian wine...

    SPOT AND FORWARD RATES Arvin Australian Imports has agreed to purchase 10,000 cases of Australian wine for 4 million Australian dollars at today's spot rate. The firm's financial manager, Sarah Vintnor, has noted the following current spot and forward rates: U.S. Dollar/Australian Dollar Australian Dollar/U.S. Dollar Spot 0.7654 1.3065 30-day forward 0.7634 1.3099 90-day forward 0.7622 1.3120 180-day forward 0.7599 1.3160 On the same day, Vintnor agrees to purchase 10,000 more cases of wine in 3 months at the same...

  • Canadian Dollar: Spot and Forward (C$/$) Euro: Spot and forward ($/€) Mid rates Bid Ask Mid...

    Canadian Dollar: Spot and Forward (C$/$) Euro: Spot and forward ($/€) Mid rates Bid Ask Mid rates Bid Ask spot 1.2645 1.2639 1.2651 1.2390 1.2387 1.2393 Forward 3-week 23 27 19 15 3-month 135 128 155 146 7a. How much $100 will cost you in Canadian Dollar and Euro? (Hint: you are buying USD). 7b. What are 3-week and 3-month forward bid and ask rate for Canadian Dollar and Euro? 7c. Based on information above, what are the profit margin...

  • Dollar/Euro Forwards. Use the following spot and forward​ bid-ask rates for the U.S.​ dollar/euro ​(US$/euro€​) from...

    Dollar/Euro Forwards. Use the following spot and forward​ bid-ask rates for the U.S.​ dollar/euro ​(US$/euro€​) from December ​10, 2010, to answer the following​ questions: a. What is the​ mid-rate for each​ maturity? b. What is the annual forward premium for all​ maturities? c. Which maturities have the smallest and largest forward​ premiums? Period Bid Rate Ask Rate spot 1.32311.3231 1.32321.3232 1 month 1.32301.3230 1.32311.3231 2 months 1.32281.3228 1.32291.3229 3 months 1.32241.3224 1.32271.3227 6 months 1.32151.3215 1.32181.3218 12 months 1.31941.3194 1.31981.3198...

  • Use the following spot and forward​ bid-ask rates for the Japanese​ yen/U.S. dollar​ (¥/$) exchange rate...

    Use the following spot and forward​ bid-ask rates for the Japanese​ yen/U.S. dollar​ (¥/$) exchange rate from September​ 16, 2010, to answer the following​ questions: a. What is the annual forward premium on the yen for all​ maturities? (Assume that the U.S. dollar is the home currency. Also use the​ Mid-Rate values computed in part​ a.) b. Which maturities have the smallest and largest forward​ premiums? Period ¥/$ Bid Rate ¥/$ Ask Rate spot 85.99 86.03 1 month 85.61 85.66...

  • Question 4 (total of 50 points) A. Use Table 4.1 for the spot and forward bid-ask...

    Question 4 (total of 50 points) A. Use Table 4.1 for the spot and forward bid-ask rates for the Japanese yen/U.S dollar (/S) exchange rate to answer the following questions. Table 4.1. Spot and Forward Bid-ask Rates Period Days Forward Bid Rate Ask Rate spot l month 6 months 24 months 30 180 720 114.23 113.82 112.05 106.83 114.27 113.87 112.11 106.98 1. Calculate the mid-rates from the bid-ask rate quotes 2. Calculate the forward premium on the different maturities...

  • Determine if any arbitrage is possible for US Investor C) Bid Quote $1.60 Ask Quote $1.62 Spot ra...

    Determine if any arbitrage is possible for US Investor C) Bid Quote $1.60 Ask Quote $1.62 Spot rate for the British pound Spot rate for the Euro Spot rate for the Euro in British pound. $1.20 £0.74 S1.21 £0.745 D) Bid Quote 0.621 Ask Quote £0.617 Spot rate for the British pound Spot rate for the NZS Spot rate for the NZS in British pound. NZS1.82 £0.339 NZS1.786 £0.338 Determine if any arbitrage is possible for US Investor C) Bid...

  • Use the rates provided below for the problem. Bid Ask Spot GBP/USD 1.5102 1.5195 Forward (90...

    Use the rates provided below for the problem. Bid Ask Spot GBP/USD 1.5102 1.5195 Forward (90 day) GBP/USD 1.5005 1.5085 Bid Ask Spot USD/JPY 123.22 128.55 Forward (90 day) USD/JPY 120.25 122.35 How many JPY can you get for GBP 50 million today? Calculate Bid and Ask for GBP/JPY and show the calculations in details.

  • 11) (6 pts) World Nation Bank offers the following information (ignore bid/ask spreads: Spot rate...

    11) (6 pts) World Nation Bank offers the following information (ignore bid/ask spreads: Spot rate on Euro 90 day forward rate on Euro Customers can borrow or deposit US dollars for 90 days at an annualized rate of 3.6% per year (0.9% per 90 days) Customers can borrow or deposit Euros for 90 days at a 1.2% per year (0.3% per 90 days) $1.118 (US$1.118/1EUR) $1.129 (US$1.129/1EUR) n annualized rate of Suppose a European investor has 100,000 Euros,if they deposit...

  • Pound: Spot and Forward Mid Rates Bid Ask 14484 14481 14487 Yen: Spot and Forward 15)...

    Pound: Spot and Forward Mid Rates Bid Ask 14484 14481 14487 Yen: Spot and Forward 15) Mid Rates Bid Ask Spot 129.87 129.82 129.92 Forward Rates 1 month 129.68 -20 -18 6 months 128.53 -136 -132 Swaps 2 year 117.65 1232 1212 3 year 115.50 1452 1422 1.4459 1.4327 -24 -154 -160 1.4250 1.4225 -238 -265 -230 -253 Refer to the above Table. The current spot rate of dollars per pound as quoted in a newspaper is A £1.4484/$: $0.6904/£...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT