It is quoted at a premium since the forward rate is higher than the spot rate.
Premium= $2.25 - $2.2 = $0.05
Annualized premium = ($0.05/$2.2) * (12/6) * 100 = 4.54%
If the spot rate of the British pound is $2.2, and the 180-day forward rate is...
Suppose the spot rate and forward rate for the British pound are $1.25/₤ and $1.2/₤ respectively. Assume the forward pound is selling at an 8% (annualized) discount, what is the number of days of the forward contract? a. 60 days b. 90 days c. 180 days d. 30 days
The spot rate on the London market is £0.5500/$, while the 90-day forward rate is £0.5579/$. What is the annualized forward premium or discount on the British pound? (Round answer to 2 decimal places, e.g. 17.54%. Use 360 days for calculation.) Please write out the equation. I am trying to teach myself.
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...
Given that the spot rate is 1.5 euros per pound and the forward euro-pound exchange rate is 1.575 euros per pound calculate the forward premium discDunt on the British pound and indicate which of the two it is. Consider a Dutch investor with 1 000 euros to pace in a bank deposit in either the Netherlands or Great Britain. The one-year interest rate on bank deposits is 2% in Britain and 4.04% in the Netherlands. The one year forward euro-pound...
The one-year forward rate of the British pound is $1.3985, while the current spot rate is $1.2239. Based on the forward rate, what is the expected percentage change in the British pound over the next year? Round to four decimals. Example: 0.1234
The SF/$ 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?
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.
Assume the spot rate for the British pound is currently 15604 while the year forward rate is €15587. A risk tree asset in the United States is currently earning 26 percent of interest rate party holds, approximately what can you earn on a 1-year tree British security Ο Ο Ο Ο Ο Multiple Choice o 228% 228x o 223 223% o 246% лек o О 249% o О 23%
Spot Question 2 Given below are spot and forward rates expressed in US dollars per unit of the Euro and £ Rates 1.5393 1.6030 30 days forward 1.5406 1.6006 60 days forward 1.5425 1.6000 90 days 1.5431 1.5945 180 days 1.5478 1.5859 Required: i. Is the 90-day forward € quoted at a discount or at a premium? ii. Is the 90-day forward contract in pound trading at a discount or at premium? iii. Relative to the pound is the 180...