1. Based on the following information, answer the problems showing procedure for each problem. CURRENCY SPOT & FORWARD RATES | TABLE_1 U.S./Can. $1 U.S. $1 Cdn Cdn.$ U.S. $ in in Country per unit per unit Cdn.$= U.S.$= 1.5833 0.6316 SPOT 1 month forward 1.5847 2 months forward 1.5861 3months forward 1.5879 6months forward 1.5932 12months forward 1.6041 3years forward 1.6328 5years forward 1.6538| 7years forward 1.6738 10years forward 1.7133 (pound) 2.4582 2.4559 2.454 2.4525 2.4474 2.4392 (euro) 1.5504 1.5497 1.549 1.5489 Britain 1.5526 1 m forward 2 m forward 3 m forward 6 m forward 12 m forward Europe 1 m forward 3 m forward 6 m forward 12 m forward 1.5506 Japan 0.631 1.5498 0.6305 0.6298 1.5472 1.5445 1.5362 1.5206 0.9792 0.9779 0.9755 0.9722 0.9666 0.6277 0.6234 0.6124 0.6047 0.5974 0.5837 (Yen) 0.013034 0.008232 1 m forward 0.013066 0.008245 3 m forward 0.013131 0.00827 6 m forward 0.013231 0.008305 12 m forward 0.013453 0.008387 Cdn.$ in 2001: High 1.5028 Low 1.6183 Average 1.5701 0.6654 0.6179 0.6369 http://www.bmo.com/economic/regular/fxrates.html. September 18, 2002. a) The premium or discount of the EURO with respect to the USD of a six month forward is: b) The premium or discount of the Japan Yen with respect to the CAD of a twelve month forward is: c) The premium or discount of the USD with respect to the British pound (GBP) of a two month forward is:
1. Based on the following information, answer the problems showing procedure for each problem. CURRENCY SPOT & FORWARD RATES | TABLE_1 U.S./Can. $1 U.S. $1 Cdn Cdn.$ U.S. $ in in Country per unit per unit Cdn.$= U.S.$= 1.5833 0.6316 SPOT 1 month forward 1.5847 2 months forward 1.5861 3months forward 1.5879 6months forward 1.5932 12months forward 1.6041 3years forward 1.6328 5years forward 1.6538| 7years forward 1.6738 10years forward 1.7133 (pound) 2.4582 2.4559 2.454 2.4525 2.4474 2.4392 (euro) 1.5504 1.5497 1.549 1.5489 Britain 1.5526 1 m forward 2 m forward 3 m forward 6 m forward 12 m forward Europe 1 m forward 3 m forward 6 m forward 12 m forward 1.5506 Japan 0.631 1.5498 0.6305 0.6298 1.5472 1.5445 1.5362 1.5206 0.9792 0.9779 0.9755 0.9722 0.9666 0.6277 0.6234 0.6124 0.6047 0.5974 0.5837 (Yen) 0.013034 0.008232 1 m forward 0.013066 0.008245 3 m forward 0.013131 0.00827 6 m forward 0.013231 0.008305 12 m forward 0.013453 0.008387 Cdn.$ in 2001: High 1.5028 Low 1.6183 Average 1.5701 0.6654 0.6179 0.6369 http://www.bmo.com/economic/regular/fxrates.html. September 18, 2002. a) The premium or discount of the EURO with respect to the USD of a six month forward is: b) The premium or discount of the Japan Yen with respect to the CAD of a twelve month forward is: c) The premium or discount of the USD with respect to the British pound (GBP) of a two month forward is:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:1. Based on the following information, answer the problems showing procedure for each
problem.
CURRENCY SPOT & FORWARD RATES
TABLE_1
U.S./Can.
$1 U.S. $1 Cdn
Cdn.$
U.S. $
in
in
Country
per unit per unit
Cdn.$= U.S.$=
1.5833
0.6316
SPOT
1 month forward 1.5847
2 months forward 1.5861
3months forward 1.5879
6months forward 1.5932
12months forward 1.6041
3years forward 1.6328
5years forward 1.6538|
7years forward 1.6738
10years forward 1.7133
Britain
1 m forward
2 m forward
3 m forward
6 m forward
12 m forward
Europe
1 m forward
3 m forward
6 m forward
12 m forward
Japan
(pound) 2.4582
2.4559
2.454
2.4525
2.4474
2.4392
1.5504
1.5497
1.549
1.5489
1.5506
(Yen) 0.013034 0.008232
1 m forward 0.013066 0.008245
1.5526
1.5498
1.5472
1.5445
1.5362
1.5206
0.9792
0.9779
0.9755
0.9722
0.9666
0.631
0.6305
0.6298
0.6277
0.6234
0.6124
0.6047
0.5974
0.5837
(euro)
Cdn.$
in 2001:
High 1.5028
Low 1.6183
Average 1.5701
0.6654
0.6179
0.6369
3 m forward 0.013131
0.00827
6 m forward 0.013231 0.008305
12 m forward 0.013453 0.008387
http://www.bmo.com/economic/regular/fxrates.html. September 18, 2002.
a) The premium or discount of the EURO with respect to the USD of a six month forward
is:
b) The premium or discount of the Japan Yen with respect to the CAD of a twelve month
forward is:
c) The premium or discount of the USD with respect to the British pound (GBP) of a two
month forward is:
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VIEWPart (a) Calculation of the premium or discount of the EURO with respect to the USD is as follow:
VIEWPart (b) Calculation of the premium or discount of the JPY with respect to the CAD is as follow:
VIEWPart (C) Calculation of the premium or discount of the USD with respect to the GBP is as follow:
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