Omni Advisors, an international pension fund manager, plans to sell equities denominated in Swiss francs (CHF) and purchase anequivalent amount of equities denominated in South African rands (ZAR).Omni will realize net proceeds of 3 million CHF at the end of 30 days and wants to eliminate the risk that the ZAR will appreciaterelative to the CHF during this 30-day period. The following exhibit shows current exchange rates between the ZAR, CHF, and the U.S.dollar (USD).MaturitySpot30-day90-dayCurrency Exchange RatesZAR/USDBid6.26996.25566.2122Required:Calculate the following:Ask6.28076.26596.2218CHF/USDBid1.53001.52441.5076b. The current value of Omni's Swiss equity portfolio in ZAR.Note: Round your answer to 2 decimal places.a. The CHF/ZAR cross-currency rate Omni would use in valuing the Swiss equity portfolio.Note: Round your answer to 9 decimal places.Cross-currency rateCurrent value of Omni's Swiss equity portfolio in ZARAnnualized forward discountAsk1.5370Answer is not complete.1.53031.5133c. The annualized forward premium or discount at which the ZAR is trading versus the CHF.Note: Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.

The relative worth of two currencies, or the amount of one currency that may be exchanged for one…

a. The CHF/ZAR cross-currency rate Omni would use in valuing the Swiss equity portfolio. Note: Round your answer to 9 decimal places. b. The current value of Omni's Swiss equity portfolio in ZAR. Note: Round your answer to 2 decimal places. c. The annualized forward premium or discount at which the ZAR is trading versus the CHF. Note: Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.

a. The CHF/ZAR cross-currency rate Omni would use in valuing the Swiss equity portfolio. Note: Round your answer to 9 decimal places. b. The current value of Omni's Swiss equity portfolio in ZAR. Note: Round your answer to 2 decimal places. c. The annualized forward premium or discount at which the ZAR is trading versus the CHF. Note: Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.

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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Question

Omni Advisors, an international pension fund manager, plans to sell equities denominated in Swiss francs (CHF) and purchase an
equivalent amount of equities denominated in South African rands (ZAR).
Omni will realize net proceeds of 3 million CHF at the end of 30 days and wants to eliminate the risk that the ZAR will appreciate
relative to the CHF during this 30-day period. The following exhibit shows current exchange rates between the ZAR, CHF, and the U.S.
dollar (USD).
Maturity
Spot
30-day
90-day
Currency Exchange Rates
ZAR/USD
Bid
6.2699
6.2556
6.2122
Required:
Calculate the following:
Ask
6.2807
6.2659
6.2218
CHF/USD
Bid
1.5300
1.5244
1.5076
b. The current value of Omni's Swiss equity portfolio in ZAR.
Note: Round your answer to 2 decimal places.
a. The CHF/ZAR cross-currency rate Omni would use in valuing the Swiss equity portfolio.
Note: Round your answer to 9 decimal places.
Cross-currency rate
Current value of Omni's Swiss equity portfolio in ZAR
Annualized forward discount
Ask
1.5370
Answer is not complete.
1.5303
1.5133
c. The annualized forward premium or discount at which the ZAR is trading versus the CHF.
Note: Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places.

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