The foreign exchange department at Tokyo’s Daiwa Bank quoted the spot rate on the euro at €0.007230/¥. The 90-day forward rate is quoted at a premium of 4.20 percent on the euro. What is the 90-day forward rate? (Round answer to 6 decimal places, e.g. 15.251945. Use 360 days for calculation.)
Please write out the equation. I am trying to self teach myself this.
Forward rate of Euro is quoted at premium
It means that Yen will buy fewer euros in future
Hence, forward rate = Spot rate - Premium
= 0.007230 - 4.20%*90/360
= Euro 0.007154085/Yen
i.e. Euro 0.007154/Yen
The foreign exchange department at Tokyo’s Daiwa Bank quoted the spot rate on the euro at €0.007230/¥. The 90-day forwar...
The foreign exchange department at Tokyo’s Daiwa Bank quoted the spot rate on the euro at €0.007035/¥. The 90-day forward rate is quoted at a premium of 5.70 percent on the euro. What is the 90-day forward rate? (Round answer to 6 decimal places, e.g. 15.251945. Use 360 days for calculation.) Forward rate € 0.007135 /¥ Your answer is incorrect. Try again.
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.
The following exchange rates exist on a particular day. Spot exchange rate: U.S. $1.400/euro Forward exchange rate (90 days): U.S. $1.427/euro The following (annualized) interest rates on 90-day government bonds also exist on this day: Euro-denominated bonds: 8% U.S. dollar–denominated bonds: 16% Financial investors in all countries have the expectation that the spot exchange rate in 90 days will be 0.7100 euro/U.S. dollar. Are investors expecting the euro will appreciate or depreciate during the next 90 days? Consider the comparison...
The spot exchange rate #110/$ has a 90 day forward premium of 12 percent APR. The 90 day forward exchange rate is: Multiple Choice ¥113.30/$1. ¥122.90/$1. None of the options. ¥116.60/$1. ¥106.70/$1.
Suppose the one-year forward $1€ exchange rate is $1.7 per euro and the spot exchange rate is $1.8 per euro. What is the forward premium on euros (the forward discount on dollars)? The forward premium on euros is percent. (Give your answer as a percentage with one decimal and do not forget a negative sign, if appropriate.)
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 spot and 90‑day forward rates for the euro are $1.3320/€ and $1.3402/€, respectively. The euro is said to be selling at a forward__________ (annualized %). a. Premium 1.4% b. Premium 2.46% c. Discount 1.4% d. Discount 2.46%
Suppose the one-year forward $7€ exchange rate is $1.9 per euro and the spot exchange rate is $1.6 per euro. What is the forward premium on euros (the forward discount on dollars)? The forward premium on euros is 18.8 percent. (Give your answer as a percentage with one decimal and do not forget a negative sign, if appropriate.) Given the above information, what is the difference between the interest rate on one-year dollar deposits and that on one-year euro deposits...
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...
Suppose the exchange rate for the Swiss Franc is quoted as SF 1.10 in the spot market and SF 1.15 in the 90-day forward market. Does the financial market expect the franc to strengthen or weaken relative to the dollar?