The US dollar (USD) to Thai baht (THB) spot exchange rate was 100 USD = 3231.78...
The US dollar (USD) to Thai baht (THB) spot exchange rate was 100 USD = 3231.78 THB in September 2018. By January 2019 it had moved to 100 USD = 3118.74 THB. The 30-day forward rate then was 100 USD = 3198.70 THB.
i. Calculate the appreciation / depreciation of the THB versus the USD. Did the THB appreciate or depreciate against the USD?
ii. What was the interest rate differential between the two currencies in January 2019?
Homework Answers
i)The THB has appreciated in value against the USD.
Appreciation = (3231.78 - 3118.74) / 100 = 1.13 THB / Dollar
ii)
Let id=The interest rate in the domestic currency
if=The interest rate in the foreign currency
(1+ id)/(1 + if) = F/S
= 31.987/ 31.1874 = 1.004
Add Answer to:
The US dollar (USD) to Thai baht (THB) spot exchange rate was
100 USD = 3231.78...
A forex dealer in Bangkok is buying US dollars (USD) in exchange for Thai Baht (THB)...
A forex dealer in Bangkok is buying US dollars (USD) in exchange for Thai Baht (THB) at a rate of USD 1 = THB 25.0 and selling Chinese yuan (CNY) at a rate of CNY 1 = THB 3.0 . A Bank of China branch next door is selling USD for CNY at a rate of USD 1 = CNY 8.2. A speculator plans to earn an arbitrage profit by first going to the dealer, where she will exchange USD...
The following table shows the US$/C$ spot rate and forward rates as of January 11, 2019....
The following table shows the US$/C$ spot rate and forward rates
as of January 11, 2019.
(a)
Covert the above exchange rates into the direct quotes.
(b)
Does the forward rate structure imply that the Canadian dollar
will depreciate or appreciate against the US dollar over the
next
year?
c)What is the implied annual rate of appreciation/depreciation
of the Canadian dollar against the US dollar over the next
three months, over the next six months, and over the next
year?...
[Speculative attack] Assume Thailand unilaterally defends an exchange rate of 1 dollar to 24 baht with...
[Speculative attack] Assume Thailand unilaterally defends an exchange rate of 1 dollar to 24 baht with a foreign reserve of 40 billion US dollar. Suppose an investor wants to implement a speculative attack on baht. (a) What is the minimum amount of baht that this investor should sell so that the Thai government will use all her foreign reserves to defend the exchange rate? (b) Suppose the investor borrows just enough baht for the attack and the transaction cost for...
22 The spot ask USD/GBP exchange rate is $1.89 - £100. The spot bid USD/GBP exchange rate is $1.88 - £100. What is the...
22 The spot ask USD/GBP exchange rate is $1.89 - £100. The spot bid USD/GBP exchange rate is $1.88 - £100. What is the profit (loss) if an investor buys $10,000,000 worth of British pounds and simultaneously sell the pounds proceeds of that purchase? points Multiple Choice 302.50:11 0 ($52,910) 0 None of the options 0 (552,632) 0 $52,910 0 $52,632 The dollar-euro exchange rate is $1.40 - €1.00 and the dollar-yen exchange rate is 110 - $1.00. What is...
Suppose the annual interest rate is 2 percent in the US and 4 percent in Germany, the spot exchange rate is USD 1.60 / E...
Suppose the annual interest rate is 2 percent in the US and 4 percent in Germany, the spot exchange rate is USD 1.60 / EUR, and the 1year forward rate is USD 1.58 / EUR. What is the arbitrage profit in USD at the end of the year if you start by borrowing USD 5,000,000?
If the exchange rate between the USD and CAD is 1 USD = 1.35 CAD, then...
If the exchange rate between the USD and CAD is 1 USD = 1.35 CAD, then it changes to 1 USD = 1.20 CAD. Then the US Dollar has appreciated against the Canadian Dollar currency. True or False and why: If I received a pay raise for the last three years, then it means that I am doing better and have a better quality of life." True or false and why: If the CPl in 2018 is 250 and the...
Currencies-U.S. dollar foreign-exchange rates. in US$ per US$ Country/currency British Pound 1.5347 0.6516 Norwegian Kroner 0.1690...
Currencies-U.S. dollar foreign-exchange rates. in US$ per US$ Country/currency British Pound 1.5347 0.6516 Norwegian Kroner 0.1690 5.9172 Thai Baht 0.0310 32.258 Mr. Charles imports light bulbs from Norway to sell in Chicago. He can contract today to pay 10,500 Norwegian Kroner for a shipment of light bulbs and to sell the light bulbs for $1,850. However, all payments and receipts will not occur for 30 days. Which of the following is true of this scenario? a. Although the current US...
The exchange rate is 0.75 US dollars (USD) per 1.00 Canadian dollar (CAD) when the price of a Big Mac in New York is 3.00 USD and the price of a Big Mac in Toronto is 4.00 CAD.
The exchange rate is 0.75 US dollars (USD) per 1.00 Canadian dollar (CAD) when the price of a Big Mac in New York is 3.00 USD and the price of a Big Mac in Toronto is 4.00 CAD. If the price of a Big Mac in Toronto increases to 5.00 CAD but the price of the Big Mac in New York remains at 3.00 USD, the Canadian dollar will be expected to appreciate against the US dollar in the near...
Spot rates and forward rates. On January 1, 2015, one USD can be exchanged for eight...
Spot rates and forward rates. On January 1, 2015, one USD can be exchanged for eight foreign currencies (FC). The dollar can be invested short term at a rate of 4%, and the FC can be invested at 5%. 1. Calculate the direct and indirect spot exchange rates for Jan 1, 2015. 2. Calculate the 180-day forward rate to buy FC (assume 365 days per year.) 3. If the spot rate is 1FC = $0.740 and the 90-day forward rate...
The following table shows the US$/C$ spot rate and forward rates
as of January 11, 2019.
(a)
Covert the above exchange rates into the direct quotes.
(b)
Does the forward rate structure imply that the Canadian dollar
will depreciate or appreciate against the US dollar over the
next
year?
c)What is the implied annual rate of appreciation/depreciation
of the Canadian dollar against the US dollar over the next
three months, over the next six months, and over the next
year?...
22 The spot ask USD/GBP exchange rate is $1.89 - £100. The spot bid USD/GBP exchange rate is $1.88 - £100. What is the profit (loss) if an investor buys $10,000,000 worth of British pounds and simultaneously sell the pounds proceeds of that purchase? points Multiple Choice 302.50:11 0 ($52,910) 0 None of the options 0 (552,632) 0 $52,910 0 $52,632 The dollar-euro exchange rate is $1.40 - €1.00 and the dollar-yen exchange rate is 110 - $1.00. What is...
Currencies-U.S. dollar foreign-exchange rates. in US$ per US$ Country/currency British Pound 1.5347 0.6516 Norwegian Kroner 0.1690 5.9172 Thai Baht 0.0310 32.258 Mr. Charles imports light bulbs from Norway to sell in Chicago. He can contract today to pay 10,500 Norwegian Kroner for a shipment of light bulbs and to sell the light bulbs for $1,850. However, all payments and receipts will not occur for 30 days. Which of the following is true of this scenario? a. Although the current US...
Most questions answered within 3 hours.
-
Write a program to score the paper-rock-scissor game. Each of
two users types in either P,R...
asked 3 minutes ago -
Calculate the equillibrium constent K for a redox reaction that
has E°cell = -.98 V at...
asked 15 minutes ago -
A concave spherical mirror has a radius of curvature of
magnitude 19.6 cm.
(a) Find the...
asked 17 minutes ago -
3. draw a diagram of the magnetic field:
a. around a long straight wire with a...
asked 16 minutes ago -
If you titrated 30.0 mL of 0.1 M HCl with 0.1 M NaOH, indicate
the approximate...
asked 24 minutes ago -
NADH passes electrons into the electron transport chain. List
the carriers that would receive the electrons,...
asked 32 minutes ago -
A cylindrical cable with a resistivity of 1.6x10-8 Ω·m and cross
sectional area of 3x10-5 m^2...
asked 32 minutes ago -
True or False.
A consumer with convex preferences who is indifferent between
the bundles (5,2) and...
asked 36 minutes ago -
A diamond's index of refraction for red light, 656 nm, is 2.410,
while that for blue...
asked 49 minutes ago -
Compare HPLC, SPE, and GC. Identify the differences, the
advantages, and the weaknesses of each method.
asked 50 minutes ago -
Characteristic x-rays emitted by potassium have a wavelength of
0.374 nm. What is the energy of...
asked 52 minutes ago -
there is a function to create two random numbers between 1 and
25 and a function...
asked 1 hour ago